E-commerce has revolutionized how business is conducted on a global scale. It has made the process of importing and exporting a reality for small-scale companies unlike in the past when doing business on a global scale was a provision for global multinational enterprises (MNEs) (Radebaugh, Sullivan & Daniels, 2015). Alibaba.com and other e-commerce websites such as www.trade-india.com attribute their success to the cost-effectiveness of their services as they are keen on logistics, this is also coupled by the ease of using the site either to buy or sell. A cost-effective alternative attracts international trade players especially considering the recent global economic crisis. The ease of use makes the site useful to a large number of small market enterprises (SMEs) that require basic functions accessed without any trouble.
In addition, e-commerce sites like Alibaba.com have included features to enhance transparency, for example, one can see how a supplier is rated, depicting how credible a source is (Radebaugh, L. H., Sullivan, D. P., & Daniels, J. D 2015). The ease of using a platform like Alibaba.com and the ability to access products at different corners of the globe are qualities that intrigue. Alibaba.com makes importing and exporting straightforward in terms of efficiency and effectiveness. Hence, I am more interested in including e-commerce platforms in the operation SME's because of the aforementioned features of e-commerce platforms such as Alibaba.com.
Alibaba.com, China's largest Business-to-Business (B2B) website, has a homepage that showcases its products classified under the main categories including school supplies and home appliances. Under a certain category, for instance, home appliances, a user's confidence is influenced by the ratings termed here as transaction levels (Alibaba Group). Products from different suppliers with different transaction levels are displayed. When a product is selected, other products from the manufacturing company are also previewed. The process is completed by a prompt to contact the supplier or order the commodity, relevant information is then filled by a user (Alibaba Group). The process is beneficial to both the user and the company as the user gets access to a wider pool of products to choose from hence can be biased based on quality. A supplier can as well showcase his or her different commodities thus marketing other commodities other than the one purchased. The transaction levels evident in the website reduces the risk of fraud that is common among e-commerce sites.
For an SME considering a shift to international trade through importing and exporting products, e-commerce is the way to go. The cost margin of operations for an SME is narrow, a cost-efficient mechanism of conducting trade will be beneficial to a business. Despite the fact that services offered by e-commerce sites come at a low cost, access to quality and more marketable products is guaranteed. Unlike in the past where quality products were learned of at trade fairs and exhibitions they can now be analyzed in detail on an e-commerce platform, for example, Alibaba.com without incurring any related costs.
Furthermore, an SME can access customers on a global scale. This prospect has been impossible specifically for SME's which rely heavily on local markets (Radebaugh, L. H., Sullivan, D. P., & Daniels, J. D 2015). With e-commerce, SME's are not limited geographically, hence explaining the large customer base.
Alibaba.com and other online business platforms are aware of online fraud and its consequences, SME's are protected from fraudulent suppliers through use of information pertaining the suppliers and other means. However, online platforms are susceptible to multiple forms of fraud hence SME's should exercise caution when using e-commerce platforms.
Product promotion is essential for publicizing the image of a company and its products, e-commerce platforms promote products efficiently in terms of access to the market. However, for personalization services such as priority listing and quality introduction, extra charges are applied (Radebaugh, L. H., Sullivan, D. P., & Daniels, J. D 2015).
A supplier may defraud someone importing a commodity since it is tedious for an importer in Chicago, for example, to track a supplier in Beijing. To reduce this risk, online commerce platforms provide information to guarantee the reliability of a source. In doing so, they recommend some business enterprises as safe, some have limited information and are not rated, they is perceived as less credible sources by an SME. The effort applied to increase transparency are productive to some extent, but a third party or misleading information from the supplier could substantiate fraud. It is, therefore, necessary, despite the efforts taken, to be cautious of fraud in online transactions.
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