Growth of E-Commerce and its impact on traditional

commerce: A descriptive analysis

Submitted By:
Bilawal Hussain
L1S17MCOM0027
Session 2017 - 2019
Master of Commerce (M.Com.)
(Accounting & Finance)

Project Supervisor:
Waqas Zaki

School of Accounting & Finance

Faculty of Management Studies
University of Central Punjab
1 - Khayaban-e-Jinnah Road, Johar Town, Lahore, Pakistan
 Growth of E-Commerce and its impact on traditional
commerce: A descriptive analysis

A Project Submitted to the University of Central Punjab in Partial Fulfillment of

the Requirements for the Degree of Masters of Commerce (Accounting & Finance)

Submitted By:
Bilawal Hussain
L1S17MCOM0027
Session 2017-2019

Supervised By:
Waqas Zaki

School of Accounting & Finance

Faculty of Management Studies
University of Central Punjab
1 - Khayaban-e-Jinnah Road, Johar Town, Lahore, Pakistan
 Declaration

I, Bilawal Hussain, Registration No. L1S17MCOM0027, student of Masters of Commerce

(M.Com.), hereby declare that the matter printed in the project titled, “Growth of E-commerce

and its impact on traditional commerce: A descriptive analysis” is my own work and has not

been printed, published and submitted as research work in any form in any University, Research

Institute etc., it has been properly acknowledged to the original author.

Date: 18/09/2018

Signature of Student ____________________________

Name of Student: Bilawal Hussain
Registration Number: L1S17MCOM0027

iii
 Certificate of Approval by Supervisor

It is certified that the work contained in this project titled, “Growth of E-commerce and its

impact on traditional commerce: A descriptive analysis” has been carried out and completed

by Mr. Bilawal Hussain, Registration No. L1S17MCOM0027 under my supervision during his

Masters of Commerce (Accounting and finance) studies at School of Accounting and Finance,

University of Central Punjab, Lahore, Pakistan.

Date: __________________ _____________________

Waqas Zaki
(Supervisor)

iv
 Certificate of Examiners

It is certified that the quantum and quality of the research work contained in this thesis titled

“Growth of E-commerce and its impact on traditional commerce: A descriptive analysis” is

adequate for the award of degree of Master of Commerce in Commerce.

Internal Examiner (Supervisor):

Signature: ____________________________

Name: Waqas Zaki

Date: ____________________________

Project In charge (Dr. Zahid Ahmad):

Signature: ____________________________

Name: ____________________________

Date: ____________________________

Dean Faculty of Management studies (Prof. Dr. Faisal Mustafa):

Signature: ____________________________

Name: ____________________________

Date: ____________________________

v
 Acknowledgement
In the name of Allah Almighty: the most Gracious, the most Merciful, the most Beneficent and

the most Bounteous. His command is only when He intends a thing that He says to it, “Be,” and

it is (Surah Ya-Sin Verse # 082). All praise to Almighty Allah alone, the Omnipresent and the

most Merciful and compassionate. The words are bound, knowledge is limited and time is short

to express His dignity. I am very thankful to ALLAH who gave a countless blessing. He is the

only Master of the whole universe and the Day of Judgment. I am very thankful to my Parents

for their continuous support in my whole life. Secondly, and most importantly I would like to

thank, all the teachers and especially to the most honorable and knowledgeable teacher and

supervisor Waqas Zaki who guided me in the right direction and taught me how to present and

write a report in the best pattern. He always there when I have any question related to project. He

always replied quickly to emails and it saved my time. He is a very courteous and cooperating

person.

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 Table of Contents
Chapter 1 ....................................................................................................................................................... 1
Introduction ................................................................................................................................................... 1
1.1 Introduction to E-Commerce: ............................................................................................................. 1
1.2 E-commerce and Traditional commerce: ............................................................................................ 2
1.3 E-commerce value chain: .................................................................................................................... 3
1.4 Business models of E-commerce: ....................................................................................................... 5
1.4.1 Merchant model: .......................................................................................................................... 6
1.4.2 Brokerage model .......................................................................................................................... 7
1.4.3 Advertising model: ....................................................................................................................... 7
1.4.4 Mixed model ................................................................................................................................ 7
1.4.5 Info me-diary model..................................................................................................................... 8
1.4.6 Subscription model ...................................................................................................................... 8
1.5 E-commerce and its major types: ........................................................................................................ 8
1.5.1 Business-to-business model (B2B) .............................................................................................. 9
1.5.2 E-commerce Business-to-Business major Models: .................................................................... 13
1.6 A B2C E-commerce cycle................................................................................................................. 19
1.7 Unique e-commerce benefits to customers ....................................................................................... 24
1.8 Why e-commerce is most important? ............................................................................................... 25
1.8.1 Expansion of brand .................................................................................................................... 26
1.8.2 Convenience ............................................................................................................................... 26
1.8.3 More reach ................................................................................................................................. 26
1.8.4 More marketing opportunities .................................................................................................... 27
1.8.5 Scalable ...................................................................................................................................... 27
Chapter 2 ..................................................................................................................................................... 28
Data Analysis .............................................................................................................................................. 28
2.1 Methodology ..................................................................................................................................... 28
2.1.1 Population .................................................................................................................................. 28
2.1.2 Sample........................................................................................................................................ 28
2.2 Survey Instrument ............................................................................................................................. 28
Chapter 3 ..................................................................................................................................................... 49
Conclusion .................................................................................................................................................. 49
3.1 Recommendations ............................................................................................................................. 50

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 Abstract

This study is conducted to know the impact of e-commerce on traditional trade. E-commerce is

very popular in other developed countries and it is slowly becoming more popular in countries

like Pakistan. The way Pakistani business men have converted or have been affected by e-

commerce are discussed in this study. Plans are a major contributor in any task to be fulfilled and

without this any task cannot be completed successfully. This study is basically targeting the

traditional businesses which have been affected by the e-commerce either positively or

negatively. Therefore interviews were conducted with the business men running a traditional

business, and those who are running an e-commerce business. Interviews were also conducted

with the people who were slowly adopting the e-commerce business and those who were doing

both at the same time. The questions asked are to the point and easy to understand. They reflect

the intent of the study conducted. The results of the study confirm the positive impact of e-

commerce on traditional trade.

Key words:
Traditional trade, business, impact on trade, performance.

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 Chapter 1

Introduction

1.1 Introduction to E-Commerce:

The buying and selling of goods, products and services on the internet is called e-commerce. E-

business is a part of e-commerce. E-business includes two things, number one is the buying and

selling of goods and services with the purpose of earning revenue and the other one are the

transactions which are helping in generating the revenues. These activities majorly include the

buying and selling of goods and services, customer service and sale support offers and the

fluency of communication between the businesses.

The availability of internet globally and the flexibility provided by the internet networks all

around the globe, E-commerce has now edge on traditional commerce. In today’s world new

profitable activities can be performed with the help of e-commerce. The cooperation has now

become very easy between different groups due to e-commerce i.e. big companies around the

world share information to make big market campaigns, markets and companies join to make

new innovative products and services and customer relations has also improved massively.

Below are mentioned major business uses related to internet and e-commerce. A successful e-

commerce program must consist of the following features and capabilities. They either are

supporting activities or a part of value chain of any particular program.

• Buying /Selling of products and services

• Improved customer service

• Organizational communication
1
 • Collaboration

• Information density

• Seller support and other systems

• Distributing, publishing and gathering information

• Providing different software updates, patches and much more

Popular products that can be purchased online are gifts, electronics, flowers, computer

software’s/hardware’s, clothing, books, bank services, airline and travel tickets, property, pets,

vehicles, laptops, accessories and many more. Most of the businesses have successfully

established them by selling these products and services online. There are many advantages of e-

commerce one of the best advantage is that e-commerce can generate maximum revenues by

reducing costs in many businesses and entities. Marketing agencies, shop retailers, banks,

insurance companies, government agencies, training institutes, online publishing companies and

travel agencies are some of the major businesses of e-commerce. Banks for example use internet

for daily enormous transactions and for their customer service all around the globe.

1.2 E-commerce and Traditional commerce:

Mostly in e-commerce there are no physical stores present, and similarly the chances of buyer

and seller meeting each other in person are very less. The internet and the telecommunication,

networking companies are playing a major role in e-commerce. Even though the basic purpose in

both traditional and e-commerce is the same to earn maximum profit but their ways are totally

different from each other. The publicity and marketing in traditional commerce is done through

magazines, flyers, brushers etc. but the marketing and publicity of products and services in e-

commerce is done totally on internet sites, social media, online catalogues etc. The

2
communication in traditional commerce is done normally through telephones, calls, postal etc.

while on e-commerce means of communication is e-mail. Letter, phones and fax are used in

traditional commerce to check whether the products are available or not, while on the other hand

mails, websites and networks are used to check the availability of products in e-commerce. To

generate orders traditional commerce uses invoices generated by printed forms but in commerce

orders are generated through mails. Products acknowledgment in traditional commerce is done

via phone or fax while in e-commerce product acknowledgements is done through EDI, websites

and mail.

In today’s world most of the companies worldwide are operating with a mixture of both

traditional and e-commerce. Almost all SMEs and large scale organizations are using e-

commerce based operations for example, companies like Wall mart, Levis, Vat an computers etc.

1.3 E-commerce value chain:

Normally the organizations related to business are involved in the activities of designing,

producing, marketing, deliver and support its products and services. All of these activities will

add value and cost to the product or service which will be distributed to the customer. The value

chain includes those activities which will add value or cost in every phase of the business process

to satisfy all the business needs.

• Companies infrastructure management

• Human resource management

• Primary activities and their inputs obtained

• Develop high tech technology to keep a competitive business

3
For example, Pipe manufacturing company will buy plastic which is raw material from a plastic

company and then they will mold and convert that plastic into pipes which will be the final

finished product and then those pipes will be distributed or shipped to distributers, retailers and

customers. The company will do marketing and provide services of these pipelines to the

customers. This is the value chain or primary activities which will develop the final product of

the company by adding value into it. So, value chain may become the process for the pipeline

company that they manufacture the products directly means they won’t be purchasing plastic

from the plastic manufactures but get involved in the plastic business themselves or do

partnership with some other plastic company. The value chain process won’t be stopped even

after delivering the pipes to the store. And if we talk about the store they will be making more

offers may be providing the fitting service to the customers who buy it.

On the other hand if we if we talk about internet which is very high in speed and the

communication between consumers, suppliers and distributors is very strong. The most attractive

thing for the companies about internet is its low cost so most of the companies take advantage of

the value chain integration. E-commerce can further improve the value chain process by cutting

down the costs of different processes which were first used in traditional commerce e-commerce

can easily identify those processes. For example earlier before e-commerce customers were

notified using postal service and mails but after e-commerce companies just simply mail the

customers using email and reduce postal costs. Before e-commerce it was a huge complicated

process to send products or services to distant customers but now everything is done through

internet which is very convenient and beneficial for both customer and the seller, revenue

generation has also increased massively. Not only the transfer and shipping of material products

4
has improved but other online products and services like computer software’s, songs or books

etc. can also be bought or sold easily through internet, this has increased the product service

improvement massively.

By eliminating the middleman Dell Company is making huge revenues through internet. Similarly the

Cisco Systems Company is making huge profits by selling their hardware’s and software’s through

internet and reducing costs. The companies Federal express and UPS improve customer service by using

enhance internet packages. In today’s world many companies use internet to reduce cost and improve

their business.

1.4 Business models of E-commerce:

As traditional business the primary purpose of e-business is also to make profit and generate

revenue. There are no doubts about the fact that internet has proved to be a great success for the

businesses around the globe and it has also increased the productivity of those businesses, the

idea will still be how to convert that productivity into profitability. The companies place

themselves in different elements of value chain to achieve the higher goal of profitability. The

primary revenue generation in e-business is rather to generate revenue by selling products or

services or cut down or minimize the supplier consumer link. In order to deliver products and

services direct to the customers many business to business models cut down the middleman by

using internet. This helps them to sell better products and improve the customer service. The last

stage would be the difference and competition between the competitors about who sells the better

products at a better price and the increasing market share which will be affecting the customer

loyalty towards the brand. Not only physical or traditional products like clothes, apparels,

hardware’s etc. are sold on internet but digital products like computer software’s, e books,

articles and songs are also sold on internet or e-business.

5
Productivity and converting it into profitability is one of the major targets in any business either

it is traditional business or e-business. E-commerce models are the renewed form of traditional

business models that were being used before e-commerce came advertising model has changed a

lot since e-commerce came, before e-commerce advertisement was done on broshures, bill

boards etc. but now there is a huge e-media for advertisement of businesses on social media and

other such forceful medias. Some of the most popular e-commerce business models are

brokerage model, advertising model, merchant model subscription model, info mediatory model

and mixed model;

1.4.1 Merchant model:

This is the model which will convert the traditional old retail model to the new updated e-

commerce linked model using the web and the internet. Merchant model has different types.

Selling of goods and services all over the internet is one of the most commonly used type.

Amazon is one of the best examples of this model which sells products all over the internet. Any

online business like amazon is using the facilities, technologies and services provided by internet

and the web to sell the products or services to the customers directly. These companies then

make their name and brand by improving their quality, giving reasonable prices and excellent

customer service on the web. This model is not only used by the e-business but also used by the

traditional business to sell their products and services in addition to their normal trade this gives

them time to settle on the internet business world by not leaving their traditional business at

once. Cisco Systems, Dell, Compaq are the most popular examples which are using both internet

and tradition to run their business. These companies most of the time cut off the middleman and

create maximum profits by cutting costs in all departments. Amazon.com is the best suited

example for this.

6
1.4.2 Brokerage model:

E-business earns commission by combining buyers and sellers on a single platform of web on

transactions in this model gittigidiyor.com and eBay are the online auction sites and they are

capable of creating more revenue by making and selling the banner advertisements on their sites.

1.4.3 Advertising model:

This is the model which is just an improvement in advertisement world, before e-commerce traditional

ways of advertisements were used but now it’s a whole new world of advertisements and it is now new

extension to the old traditional ways like TV or radio. The process is that the directories and search

engines will provide ads or content similar to how it comes on TV or radio and this will also allow the all

users to access all the content for no cost. Now once the website gets some publicity and people start to

visit the site then traffic is created, once the traffic is created then the business owners will charge the

advertisers who want to advertise their business and show their adds on your website or app in this way

Google will pay us money depending on the traffic created, more views more adds more money.

1.4.4 Mixed model:

Now this model does not only depend on the advertisement money but it has a new source which

is subscription. Some websites which are selling their services online put subscription on their

content now they have two sources of earning, one is the advertisement model and the other one

is the subscription model, they will continue to earn money through advertisement depending

upon the amount of traffic which is created. Some internet service providers like America online

are using both advertisement and subscriptions to earn revenue from their customers for internet

supply and access.

7
1.4.5 Info me-diary model:

In this model there are such e-businesses which will collect information related to customers and

businesses and then they will sell that information to interested people for The marketing

purpose, people use this information to know that which is the most trending thing in the market,

what is the most successful business these days, what is the thing that most people are asking for,

and then based on people’s choice the businesses who have bought the information will create

their profiles accordingly. This information is very useful for the advertisers for them to know

the performances of sites to bring them will adds for publicity, bizrate.com is one of such sites

which checks on and collects the information of other websites based on how their performance

is and then when they gather this information then they will sell it to different advertisers who

will use it for advertising purposes. Similarly Netzero.com is providing internet free of cost

depending on their behavior. All this informational is most beneficial for the advertisers because

they can put adds of the businesses who need marketing and get paid.

1.4.6 Subscription model:

Subscription model is all about digital stuff there is a an e-business which sells digital products

of any kind to the consumers some of them will sell analysis or business news For example

Ajanspress.com, stsreet.com, the wall street journal, consumer reports etc.

1.5 E-commerce and its major types:

The most common types of e-commerce which are most commonly used are;

• Business-to-business model (B2B)

• Business-to-consumer (B2C)

8
 • Consumer-to-consumer model (C2C)

• Consumer-to-business model (C2B)

• Non business

• Government

• Organizational (intra business)

1.5.1 Business-to-business model (B2B):

Business to business deals with those transactions which are transacted between and among

businesses. We are living in an age where almost all the companies have links with other

companies for certain reasons that may be supplies of any kind, utilities, other services and other

useful links so with this fact b2b commerce has proved to be the most useful business type and

with its multiple benefits it is the most fast growing business type. In the past few years business

to business model has the most use in the 21st century business to business model seems to be

promoting in every business and it will be adopted by every businesses. Some of the most

popular examples of business to business are Aspect development, BEA systems, Baan, Broad

vision etc.

Business to business commerce's best advantage is said to be reducing the human work, manual

activities most of the tasks which were used to be performed by humans are now being

performed on electronic media, in addition to the electronic replacing human efforts business to

business has also reduced the errors to a bigger extent, and in this way business to business has

also increased the speed of the daily business dealings to a much larger extent. The best example

of business to business type is Wall Mart. Wall Mart's largest suppliers Proctor and Gamble and

9
Johnson and Johnson provide them with all the supplies electronically and moreover all the

paperwork is also done electronically. This process is quite convenient that the suppliers can also

check the stock in any store without even reaching there physically and provide them with

supplies with time. All the business processes like business contracts, inventory status, purchase

orders, invoices etc. are handled electronically, there is least manual work involved. The basic

advantages of business to business commerce are that it reduces time cycle of delivery, reduces

the prices of products and services a lot of works are cut off due to electronic charge, it also

creates a community for business partners to share information with each other with time. Hence,

it improves the supply chain management and the businesses run with a flow. The diagram below

will show the basic business to business relation.

10
 Shipping Inventory
Logistics Status

Business Business

INTERNET

Business Business

Business Purchase
contract Order

Invoice

Figure 1.1

11
Following are described some of the benefits of business to business e-commerce:

• Because many of the labor related tasks are reduced in so the production cost has also

decreased to a higher level.

• Due to the strong supply chain management the flow of information is stronger and it is

received very timely. It’s just the matter of seconds any inform can be received from

anywhere in this world.

• Now in the age we live in human efforts are reduced and electronic media has taken over

and eventually the accuracy has increased to a much higher level.

• The whole product cycle has also improved the flow of information which took a lot of

time can be done in seconds between partners. Things are very much simpler now. Raw

materials are now received very faster and the whole business process is very quick and

customer related information is also very fast.

• The communication has now become the easiest for the business partners, it’s just a

matter of seconds to receive any mail from one business partner to another partner. The

flow and accuracy of communication has made the fields of business to business dealings

very simple and convenient.

• With the strong information flow through extremely quick communication channels the

overall system has improved, specially the inventory system the control and the

management over the inventory system has improved and its making businesses easy.

12
1.5.2 E-commerce Business-to-Business major Models:

E-commerce B2B most important models can be determined by:

• Seller

• Buyer

• Intermediary

These will control the market and its place, and the four most important marketplaces are:

• Seller controlled marketplace

• Buyer controlled marketplace

• Third party exchanges marketplace

Seller controlled marketplace:

The most popular type among business to business models for customers and businesses is seller

controlled marketplace. The traders and sellers of products like auto industry, electronics and

chemical industry etc. are combined and they have created a common place a trading place for

every buyer to come in one place and buy products from there, this also saves time and money in

various ways. Now people with businesses have developed catalogs of their products or services

which allows the customer to see that catalog ogling and purchase his favorite product or what

suits his needs.

Now days people have developed procurement apps which allows the customer to obtain

whatever he wants some of the websites also have cart service in which the customer can add

every item he desires to buy in future, the customer simply saves the item and he can later order

it in the same cart all with the help of internet and web. This procurement service has totally

13
changed the traditional buying and selling process for employees now all they have to is sit in

front of their computer or mobile phone and with a few clicks they will have their order ready to

purchase. This is very beneficial process now because it saves a lot of cost, the cost which was

invested in transport and many other places is now eliminated, in addition to cost this also

reduces the time required to complete the circle of buying and selling and also improves the time

management in procurement process. In addition to time, money this also improves the business

relations between buyers and sellers, suppliers and organizations, suppliers and industries etc.

There are several offers on e-procurement they not only provide cost beneficial offers but also

provide volume benefits. In large businesses there are large purchases and sales so e-

procurement may also automate the whole process of buying and selling making it extremely

easy for companies to buy and sell the basic benefit of this is reduced costs and increased

processing speed and time saving. The companies who are participating must know the sale and

purchase process according to their requirements by participating they can control the inventory

system more effectively and hence reducing the agent cost and eventually they can improve the

whole cycle of manufacturing. With the emerging trend of e-commerce and the use of

computerized supply chain management now e-procurement will be expected to enter into the

modern e-business world.

Buyer controlled marketplace:

This marketplace is for those companies who are very huge in terms of market share and profits

and who have huge amounts of buying powers, these are mostly a consortium of many other

large companies. Some of the best examples are Daimler Chrysler, Ford and general motors.

This model is about the buyers, a buyer or a few buyers combined will combine and initiate a

marketplace and then they will invite other sellers to come there and do biddings on products or

14
request for quotations. With the help of this model buyers are now easily able to manage the

procurement process mentioned earlier, which will result in very low costs i.e. administrative

cost and moreover they will be able to control the pricing and make a smooth pricing system.

Now day’s companies are making more investments in such buyer controlled marketplaces

because they want reduce costs, make and build new sales channels and hence increase their

market presence. A seller can perform the following if he participates in a buyer controlled

marketplace:

• Buying behaviors and its better understanding

• Pre-sales marketing and techniques of carrying it out

• Sales transactions and carrying them out.

• Post sales analysis and carrying them out

• The process of reducing orders replacement and the time of delivery cycle

• Multiple sales channel offerings

• Order management process automation

• Fulfillment process automation

The third party exchange marketplace:

As the name suggests a third party is the controller of the third-party marketplace and it’s not

done by buyers or sellers. The third-party exchange marketplace offers a direct channel where a

supplier can communicate with the buyers via internet and online platforms. The features which

are included in this marketplace procedures may be sample requests, multiple broker contacts,

promotions, rebates, information requests and different catalogs etc. The revenue is earned by the

15
fees which is generated by matching and combining sellers and buyers. These are the

marketplaces which are present mostly in horizontal and vertical markets. A vertical market has

always the main focus on one particular market or industry. Some of its best suited examples are:

verticalnet.com, sciquest.com, paperexchange.com etc.

The main focus of a horizontal market is mostly on a certain business process or a specific

function. They will make a function and will then provide the same or else automate or improve

that business process in different industries. Employee.com and Ctspace.com are the best

examples.

Partners trading agreement:

The main objectives and the primary motive of trading partners agreement is to renew and to

automate the basic process of trading between parties and the negotiation between the parties, the

whole process is to make sure that everything is running smoothly and accurately. Now in this

age trading in this way is very popular and is very useful for all companies and many other

companies have started using it. As popular and common as the extensible markup language

XML, it is expected that this model will also be that common and will be a more acceptable

initiative. In this new era the world is trying to adopt and standardize this language in the

exchange process of e-business data with the help of XML including the agreements and

electronic contracts.

1.5.3 Business-to-consumer model (B2C):

As the name suggests business to consumer is selling of goods and services to consumers

directly. Many websites like amazon.com or hepsiburada.com which are following the business

to consumer commerce are so successful that many other traditional traders and businesses have

16
now started to build their online websites and are also coming into the electronic world of

trading. In other cases e-commerce business traders supplement products and services to

traditional commerce. Wall mart and the gap are the best examples of the companies who have

adopted business to consumer type and they are very successful. Some of the best examples of e-

commerce business to consumer sites, companies and their practical advantages are mentioned

below:

 Physical space

Most of these sites have physical space availability.

 Returns

The purchased item can be returned to the store.

 Customer service

Customer service is also available in the physical stores.

 Diversity

There is a diverse product line.

 Richness

Information is rich.

 Global reach

Everything is available anywhere.

 Ubiquity

Internet is present anywhere in the world.

 Transparency

The process can be compared with each other.

The following diagram shows the b2b relation:

17
 Customer Customer

ISP ISP

Firewall

Help
Electronic
Desk
Catalog Virtual Store

Product Account

Suggestion Status
Payment Process

Figure 1.2

18
1.6 A B2C E-commerce cycle:

The major five activities in B2C e-commerce are shown below:

Info Sharing:

Some of the major and most popular applications, technologies and sources of sharing useful

information with the customers are:

 Advertisements

 Mail

 Discussion groups

 News groups

 Web sites of companies

 Catalogs

 Messaging board system

 Bulletin board system

 Conferencing of parties

Ordering:

To make an order on an e-commerce customers usually visit the company sites to view the

products which they find suitable for themselves. Whenever the customers like something and

they want to purchase it they just click on that and with just a simple click the information is sent

to the site about every detail of that product or service.

19
Payment:

Some of the most popular means of payment In business to consumer internet e-commerce

model are:

 Credit cards

 Electronic checks

 Digital cash

There are more ways to pay in b2b but these are the most used payment processes.

Fulfilment:

Fulfilment is the final process in which the product or the service is delivered to the customer

from the merchant it is basically the physical delivery of the product. In order to send the

physical products to the customer like books, grocery, electronics etc. the order can be send

using the following:

 Mails

 MNGs

 Yurtiçi Cargo

 UPS

And also providing further facilities the companies also provide faster delivery but the customer

has to make a little bit more payments than normal. When it comes to digital products like

software’s, music, electronics and other electronic stuff, then the e-business uses some of the

digital documents like:

 Privacy of the product

20
  Integrity

 Assure security

These are the digital documents which are considered more popular. Delivery address

verification and digital warehousing are the two mediums which can store such delivery products

on the computers till the time when they are delivered. The companies which are dealing with

such e-commerce concepts have two options one is that they can do these processes of

fulfillment themselves or otherwise they can also deliver them to the third party companies may

be to save time and money.

Service and support:

Whenever a business is running the best and the most attracted customers are the current

customers because they trust the brand the most and whatever they do the only thing they are

attracted to and trust is the brand’s name. In order to provide timely high quality service and

support to the customer’s e-business will do everything to support them. Because e-commerce

businesses mostly don’t have a physical presence so the most important thing for e-commerce

businesses is the customer service, the service must be timely, accurate and precise and unlike

traditional trade or business the customer service is most important in e-commerce. Some of the

best examples to provide service and support are confirmation e-mails, news flashes some of the

online surveys must also be used.

 Confirmation of e-mail:

The most commonly used confirmation system in e-commerce is the e-mail confirmation,

with this the customer can easily trace his products or any service that he wants. The

21
 basic purpose of e-mail confirmation is that the customer receives a proper notification

that his product will be received on a particular date and time.

 Periodic news flash:

Periodic news flash is basically the news reporting and updating the customer about the

new and latest information of the product and the service that they are using.

 Online surveys:

The online surveys are mostly used for the marketing purposes when these sites collect

the feedback of their customers than they can design better ideas for their customers in

the future.

 Help desk:

These help desks are used to help and guide the customers about the product or service

that they are using, in addition to it these websites also receive the feedback from the

customers about the product they are using.

 Assured online transactions:

This is to assure the website users that their information that is given to the website will

be kept in secret and no one will take their personal data. And security is one of the

reasons why people don’t prefer online business and they get stacked to the traditional

method

22
 INFO
SHARING

ORDERING

PAYMENT

FULFILLMENT

Service and
Support

Figure 1.3

23
1.7 Unique e-commerce benefits to customers:

As the trend of e-commerce is increasing day by day some of the major e-commerce benefits of

e-commerce to retailers and customers in this are mentioned in this section and with the

increasing trend every businessman today is thinking to get a platform where he can sell their

products. Anyone can get a lot of benefits by making e-commerce as a part of their business this

can improve the business to a big range. Computer networks and internet are the main sources

and places where e-commerce takes place. In the last two years many companies have started

online business and the amount of online businesses is increasing day by day.

Benefits of e-commerce:

There are countless benefits of e-commerce, some of them are mentioned below:

 Ease and convenience

 Product datasheets

 Attracting customers with visible search engine

 Warranty information

 Decreased cost of inventory management

 Customers buying habits and keeping and eye on it

 Competency

 Happy customers can sell their products

 Worldwide selling

 Economy boost

24
  Brand awareness

 Decreased costs

 Information density

 Analytics

 Scalability

 Multisite ability

1.8 Why e-commerce is most important?

Small business, biggest brands there are many different startups, businesses and companies who

have made their own e-commerce site where they will sell their products and service through an

online chain. People today are very lazy they want everything to be at their door or be maximum

possible that they don’t have to move much. People now days do not move from their homes to

go to the markets and do shopping there instead they want to stay at their homes and they wish

that the product or service that they want comes to their gate.

The five most important reasons that why e-commerce is the best business process:

 Expansion of brand

 Convenience

 More reach

 More marketing opportunities

 Scalable

25
1.8.1 Expansion of brand:

If you are running a traditional business which is not giving you the output that you need than e-

commerce is the platform which will take your business to a higher level and make it a brand

which be well known by the people. If you run an online business then you are actually

providing the customer a store which is open for 24 hours he can come and visit anytime he

wants, you will provide him services, information and by connecting with social media like

Facebook or Instagram you can easily expand your business and in this way you are not only on

the physical store but you also have multiples of other stores who are working for you with these

online platforms you can create your own market of your products and the services that you

provide. You will be then able to expand your business without even moving places and taking

your inventories too.

1.8.2 Convenience:

The physical store will not give you a 24 hour service but an e-commerce store will give you 24

hour service every second of the day the customers can visit the store anytime they want to

irrespective of the schedule that they are following. Now a days people are avoiding doing the

traditional shopping because they want to save time for other business purposes and other life

matters and also you can find any item that you want anywhere in the world.

1.8.3 More reach:

The reach in an online business is not limited to a certain area once you have an online market

then the whole world can see you. So, you can have a more reach around you and infact in the

whole world. When you compare such a business with a local store in the corner of the street

26
then you realize that there is a huge difference in what you do online and what you do in an

online store.

1.8.4 More marketing opportunities:

The marketing opportunities in an online business are too much there are so many platforms to

market your business there are Facebook ads and YouTube ads where your video ad will play

during a video the person is watching.

1.8.5 Scalable:

When a certain business has started running then the primary thought that comes to mind is that

the product or service line should increase, product range should increase and the audience

should also increase and the most important thing is to develop the product in accordance with

the demand. For all these purposes e-commerce is the site which will provide you everything

new payment processes more marketing easy shipment without moving physically.

27
 Chapter 2

Data Analysis

2.1 Methodology

This study is conducted to investigate the impact of e-commerce techniques on the traditional

trade. The technique used for the data analysis is interviews. Interviews is a qualitative research

techniques and is employed to analyze the data results. Interviews give a more clear view about

the study because it includes the direct interactions and observations of body language. In this

study interviews of general public who do online shopping and also the owners of online

businesses. Interviews were conducted to evaluate the impact of e-commerce applications on the

traditional trade filed. The study was conducted in Lahore and in the year 2018. The study is

analyzed with the help of constructing charts. A total of 17 questions were asked from the

respondents regarding the topic of research.

2.1.1 Population

Population is the overall area of the study respondents. The population in this study consists of

all the users of online shopping sites and apps and the owners of traditional stores and online

sites owners.

2.1.2 Sample

As a sample I took 15 people for interviews.

2.2 Survey Instrument

This study is a qualitative study and therefore the instrument of the survey is interviews.

28
 Are the recomendations of products according to your
needs?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.1

Interpretation:

The recommendations are mostly according to the needs most of the people always viewed the

ads which they had already searched on for example once a customer was doing a research on

studying management studies abroad and after leaving those sites when he was using social

media ads related to admissions in different universities started to appear on her news feed.

While for some percentage of people the recommendations were not according to their needs

there were just random ads.

29
 Does it make you a unique customer?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.2

Interpretation:

Most of the people believed that e-commerce has always helped her in making them a unique

customer because these e-commerce sites always know our choices and preferences of any field

that we like and they show us ads accordingly and make us a unique customer which was not

possible in traditional trade, they also send us purchase reminders and show ads related to our

interests and the rest of the 5% said that there is a huge gap in Pakistani websites about making a

customer unique based on his needs. The sites are mostly showing you the things they want to

show you but not the things that you want to see. May be in future Pakistani online sites will start

working more on customer oriented sites and provide the customers more ease in terms of

designing their own preferred site and may be the websites make a unique customer based

website.

30
 Is the purchase process easy?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.3

Interpretation:

The process seems very easy to most of the people they say that there are simple steps to

purchase a product and further that once you select a product then the website will automatically

take you to the further purchasing process ending with a confirmation phone call and the product

delivered at your gates. Purchase is easy these days because these sites are very convenient to

use you can see multiple products at a single place but some students do not prefer the debit and

credit card process but instead she likes to pay on delivery there are a lot of options available you

can also compare the prices of the products or services from different websites there was a

separate section for selection of colors on Sapphire website and further home delivery process

has made it very easy for one of the customers and the rest of the percentage said that they do not

find it easy and interesting because the feel and touch of the actual product cannot be known.

31
 Does it provide information related to
purchases?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.4

Interpretation:

Companies provide the best information about the product the information is always there with

the product. One of the customers once ordered a shirt from Akhrot clothing company and with

the shirt they sent a full detailed description of the product separately about the quality. The

ordered product always comes with all the details on an invoice from size to quality. They also

show the details before buying and also always send the e-invoice in which they give us all the

details about the products. The rest of the percentage said that the information provided by the

company is not always matching the actual product they had bought products many times and

many times the product was not what the information said about that product. Yes the companies

show information but the actual product is not very matching so people now prefer buying on

physical outlets because they cannot risk their money. And the process he uses is that he pays

when he receives the product in his hand checks it if it matches his order and if it does then he

pays to the corer man and if not than he returns the product.

32
 Does it help to enhance your business?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.5

Interpretation:

The business has really enhanced to a level where it is very easy for anyone to start a business

and previously in traditional trade the costly process was of marketing which only a few

businesses could afford but in today’s world it is quite simple for anyone to advertise his

products or services using social media and saving a lot of money and time required to market as

on traditional commerce. When e-commerce was not much popular then people used electronic

media or print media for publicity of their products or service. Print media was expensive

because it required to print ads on newspapers, pamphlets, charts billboard etc. this process was

quite costly and the other way of publicity and marketing was electronic media which was and

still is the most expensive medium to publicize the business they charge too much money for just

a few seconds of an add, but now the time has changes internet, social media and other websites

have made it so much easy for anyone to do marketing of their products without any hassle and

33
Basle of getting involved in the process of buying places to put their ads. Now people just make

a page on Facebook which is free of cost and customers are attracted based on their preferences

and also Google asks for small amount of money to do marketing of your products and in

YouTube before playing any video sometimes appears a video ad which says that we can play

the video after 5 seconds in this way the publicity of the product is done and also we can see the

video in no time, the electronic media is now going in loss since e-commerce has taken over. So,

yes e-commerce has helped the business sector a lot and he thinks that in coming day’s e-

commerce will take over electronic media completely and everyone will shift to e-commerce and

do their business there. In the end, the final result is now one of the biggest marketing platform

for any business is e-commerce it is less costly more efficient and productive and maximum

people should use it as a platform to market their products and services as they will provide

maximum output.

34
 Are you satisfied with delivery time of your
products?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.6

Interpretation:

Most of them were not satisfied with the delivery time of the products as they said that it took

three to four days for the product to receive only the person who has some patience can order

online the same product he can bought from the physical market and it will take 3 to 4 days to

deliver if order online. Some of the interviewees seemed to be satisfied with the companies

whom they are a customer of they said that they have opted those sites who are well known for

their delivery time and there excellent services and whose primary motive and mission is to

provide the best possible services to the customer of their company. Some of them have tried a

few other sites to purchase something and they were not satisfied with the delivery time as they

were very late from the due date of delivery when asked them why were they late then they

replied that the product that you ordered was not in our store it was only available on our site so

we had to import that product from abroad first so it took little more time than usual. They were

definitely not happy about the fact that these sites are showing the products that are not available

35
in their stores so why are they displaying them on their sites. The interviewees had mixed

comments about the delivery time he was happy with the company that he is using for

purchasing because they display only those products that are already available in their stock. One

of the interviewee told us about the process of delivering which included first selecting the

product or item which he wants then go to the details and add to cart and then the company will

call him about the final confirmation and ask about the address and other details and ensures the

customer that his products will be delivered on time safely. The major things in Pakistan that

lack today are service issues. Brands are not taking integrity as important element of their life as

they should know that if they lose their customers then they lose everything and delivery time is

one of the most concerned areas in ecommerce that most of the people face and really needs to

be addressed.

36
 Are you satisfied with customer relation?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.7

Interpretation:

The companies now in Pakistan are working more on the relation with the customers. Because

they are slowly realizing that customer relation is the most important thing when you have to

start an e-commerce business they also told us that the market can only be developed by the

relation with the customers and the current relation of many e-commerce businesses is good with

the customers they help in any problem solving, they will also help in replying to any query in

order to build lifetime customers and some of the interviewees said that the customer relation is

good only till the product is delivered to the customer and afterwards they forget about the

customers but not all the companies are same some provide better customer service.

37
 Is it convenient to use online sites?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.8

Interpretation:

When it comes to convenience anything is easy if you can do it while sitting on your couch and

using your phone. It requires no human effort. So it is very easy to sit in home and ordering

anything you want to purchase online weather it is service or a product. Ecommerce is basically

reducing the human effort and making people lazier. As ecommerce is spreading so the people

are becoming lazier and they just wants things to be easier for them so, yes using online sites is

easier as it removes the human effort. These sites are very easy to use these sites they are very

assessable and going to Google and searching anything we want it is very easy to have a result

and we just have to write the keyword and Google will give us the online sites related to that

product. But there are always numbers of people who will prefer shopping out and not online

shopping.

38
 Is it convenient for a consumer to search for
a product?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.9

Interpretation:

Because the whole world is connected through internet so it is very easy to find any product on

the online sites. If there is anything which is not available in our area then it can searched on any

other area around the globe. Internet is so wide spread and it’s everywhere and people have

added everything on the internet so it has now become very easy for anyone to search anything

online. One customer also shared an experience when he wanted a carpet for his car which was

not available in Pakistan so he searched it on amazon and it was available there but today

searching any product online is the easiest thing.

39
 Is it fun doing shopping this way?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.10

Interpretation:

Online shopping is not fun for all the people it is mostly for the people who are very much busy

in their professional life and they only have one or two days to spend with their family so, in

order to save time they do online shopping because they have other works to do. While the

young generation mostly like to do outing and shopping by going themselves physically and

selecting their favorite items by witnessing them physically and also having fun in outing. It is

only need basis the people who have a need to buy something they are not getting in stores so

they prefer online shopping.

40
 Will it help in reducing costs of ongoing
business operations?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.11

Interpretation:

The online computerized system has taken over so it will be very beneficial for reducing costs in

traditional commerce the most cost that was spend was on shipping and transportation but now

those costs are covered online and the dealings and mostly everything that used man power is

now done by the computers. So, yes with the new e-commerce system the costs will be cut down

and profits will increase.

41
 Will it help to improve customer-oriented
services?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.12

Interpretation:

In online business the customer service is the most important thing without good customer

services an online business cannot be successful and for the services for customers they will

improve with time but they are not up to the level they should be in Pakistan in today so it has

room for improvement and the main service in it is the delivery of goods and services so with the

emerging e-commerce systems the customer oriented services will also improve.

42
 Will it increase productivity?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.13

Interpretation:

There will be more transparency in the operations and very less chances for anyone to do fraud

and the relation of managers with each other will be good in an e-commerce business because

maximum operations are related with online buying and selling of products so promotions will

also be on based of sales. Managers will have maximum information about other companies and

also the suppliers all through internet. Managers will also be able to make better financial

decisions through the computerized inventory system. So most of the people thought that in an e-

commerce based system productivity will definitely increase.

43
 How would e-commerce help managers in an
organization?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.14

Interpretation:

E-commerce will help the managers in the daily business operations but there will come a time

that the post of manager will no longer be needed so for now the manager job is quite easy

because the dealings are done online the systems are computerized so the manager just has to

keep a check on the online systems. In e-commerce the decision making is easy because the

business will provide you a website there you can select your products and services so the main

decision making is to design user friendly website partnerships will also increase because each

and every business is somehow related to another business and since everything transparent the

shares etc. so the partners will know everything and nothing will be hidden from each other and

the partnership will be strong. So most of the people believe that e-commerce will help any

organization to grow.

44
 Will the strategic planning of any
organization increase?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.15

Interpretation:

With the passage of time e-commerce is becoming more popular amongst the organizations and

businesses. In traditional commerce everything, very operational activity, every sales and

purchase activity was done manually and the system was designed by humans and operated by

humans but now ecommerce has taken over the old traditional methods so the chances of error

are very less the tasks which were performed by the people are now performed by the computers.

Online system has taken over and as we all know computers have very rigid systems so the

chances of mistake by a computer are very low so it makes the strategic value of any business or

organization more powerful but at the same time it is reducing human jobs which is very

dangerous stat and in future computers online systems will take over humans and unemployment

rate will also increase. The online computerized system has taken over so it will be very

45
beneficial for reducing costs in traditional commerce the most cost that was spend was on

shipping and transportation but now those costs are covered online and the dealings and mostly

everything that used man power is now done by the computers. So, yes with the new e-

commerce system the costs will be cut down and profits will increase and when everything will

be in an order then the strategic planning will also become better but at the same time some of

the people believed that it can take much time for a new online business to be strategically stable.

Are the customer experiences and reviews

important?
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.16

Interpretation:

Customer experience is the most important thing when it comes to online products because we

are watching the product online and not in front of us. So, it’s a big risk to purchase that product

without even witnessing it physically or feeling its quality. So, what is the solution to this big

problem? The only solution to this problem is the customer experience. Without customer

46
experience we cannot know the value or quality of the product. That Pakistani websites have not

yet developed the system of customer experience and there is a huge question mark in the online

business industry. He says that in future e-commerce is going to take over the traditional

business so the e-commerce business companies need to have a customer experience section on

each and every product because it will make it less risky for the person who will buy it in this

way the trust on the product will increase and people will start buying with more satisfaction

based on the customer experience. So, in this he only wanted to add more details in customer

experience sector. the customer who is going to help other customer about the product because

the business holder is always going to try sell his product and in this process he will only tell the

good things about the product and not the flaws in it. So, who better than the customer who has

already consumed the product can tell about the product to the person who wants to buy it? So,

the common bonding between the customers is very important it is sue to the bonding that the

other person trusts. Word of mouth is the best marketing technique. One person will tell to other

person and the other person will tell to the third person and in this way a chain of customers will

be formed and there will be more demand and the business will expand. So the interviews made

it clear for us that the people of Pakistan are most interested in what other people tell them, they

don’t believe the ads of the companies as much as they believe people.

47
 Is the billing and payment process in e-
commerce easy?

15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Yes No Don’t know

Series 1

Figure 2.17

Interpretation:

Most of the people in Pakistan don’t like to pay money through an online system they are scared

to use their debit and credit cards for online purchasing and they think that it’s not safe to give

your details to the companies as they might be a big scam but some of the customers seemed

quite satisfied and according to him now the manpower has reduced and also human effort has

reduced almost everything today can be done online. Before e-commerce billing system in

traditional commerce required people to move physically and pay the bills to the owner but now

it’s quite simple you can pay bills and purchase things and everything can be done online without

the physical effort of the people. Now the companies have developed special billing apps

through which everything is very defined and simple for anyone to use most of the sites use the

debit and credit card system to receive payments and it is the most popular way of paying the

bills in today’s e-commerce world and accepted by the people.

48
 Chapter 3

Conclusion

In today’s world businesses are done in a different way customers are always looking for

something new and the demand of customers is always changing with time, so the businesses

today are more focused on bringing something new something innovative and cost efficient,

moreover the desire of the customer is never ending they just leave the old ideas and they always

want new things they want to exceed in everything they want to make their life easy. The

businesses today need to set themselves in order to attract customers in all new possible ways to

be known in the market full of competitors. Traditional trade methods are useful but people

today are also involved more into e-commerce as the years are passing e-commerce is getting

more and more advanced by all means and people should take full advantage of it and develop

that method of trade.

With the emerging internet business startups there are endless opportunities and possibilities for

the business sites and also for the consumers. The businesses are more advanced today and the

opportunities are also great for the new businesses and chances of great profits are also great and

there are maximum opportunities and profits for the customers. But same like other businesses

there are flaws in e-commerce business as well the biggest problem is the uncertainty of the

customers but it can also be resolved with proper planning. When starting any e-commerce

business there are many things that should be considered like market strategies and different

types related to e-commerce and many other things. If every step in e-commerce business setup

is set according to a certain plan and methods are correct and practices are accurate then the e-

commerce business will prosper in both profits and success rates.

49
3.1 Recommendations

 My first recommendation would be that everyone should accept the modern methods of

trading e-commerce and in addition to traditional trade they should also work on e-commerce

business model.

 E-commerce business should be given maximum promotion in Pakistan and the current

business holders should expand the e-commerce business to a greater level and do not take e-

commerce lightly.

 Education and knowledge should be provided in rural areas about e-commerce because that

will be the core let people know that the things that are not available in market are available

in some part of the world and show them practically that how any product can be purchased

online.

 The businesses today are mostly traditional because Pakistan has not fully developed the e-

commerce business system my recommendation is that the business owners should not

directly shift to e-commerce but make a blend of traditional and e-commerce business and it

would be a deadly combination for example one of my friend Nabeel has a physical store of

mobile phone accessories and he also has an account on daraz about the same accessories

business and he earns on both platforms.

 Online websites should have simpler process, simpler websites, no complications and people

are willing to pay cash on delivery rather than debit and credit card system. Then slowly

move towards the credit and debit card system.

 The biggest problem with the online purchasing sites is that they never post the original

picture of the product instead mobile phone pictures of product should be posted because not

even a DSLR because people believe in mobile phone camera images.

50