Introduction
Practitioners, theorists, and futurists alike concur that the challenge for businesses that want to maximize their global presence involves structuring relationships in such a way as to ensure that the right information is delivered to the right people at the right time. In all these views, information technology (IT) and e-commerce initiatives play critical roles in the strategy of global competition. If there is a common denominator to the global view of IT initiatives and e-commerce, it is that companies reap the biggest benefits not by superimposing computers on top of old work processes but by restructuring those processes and the corporate culture (Karake-Shalhoub, 2002). This strategy, over time, develops entirely new business capacities. E-commerce encompasses all business-to-business and business-to-customer transactions that involve the buying and selling of goods and services and the transfer of funds through digital communication. It also includes all the inter- as well as intra company functions such as manufacturing, marketing, finance, and selling that enable commerce and electronic data interchange, file transfer, facsimile, and interaction with a remote computer (Karake-Shalhoub, 2002).
Recently, the scope of e-commerce has expanded to the business-to-customer relationship, including trade through the Internet as well as all other ways of doing business over digital networks. Historically, e-commerce evolved from electronic data interchange EDI) that facilitated electronic exchange of ordinary business documents in grocery and transportation industries in the 1970s. It has expanded through other industries driven by the cost-saving requirement that resulted in development of data transmission conventions enabling computer-to-computer exchange of data (Karake-Shalhoub, 2002). Although employment of EDI originally only replaced paper documents with their electronic copies, substantial savings have been achieved by reducing the number of people who handled purchase orders and communication with suppliers. As producers and members of the first tier suppliers continued to expand their reliance on EDI by implementing multiple related transaction sets, many secondary and tertiary suppliers didn’t follow their example and were not in a position to answer with appropriate transactions (Karake-Shalhoub, 2002).
Despite these problems, companies have started to feel the benefits of real-time information sharing and transactions. Generally, trading partnerships evolve over time, usually starting with transactional exchanges and moving toward information sharing. All estimates concerning the growth of e-commerce have one thing in common: they point to phenomenal growth over a very short period of time (Karake-Shalhoub, 2002). As the world ages so thus the changes in business and technology, one change is E-commerce. E-commerce is creating various changes in the environment of Hong Kong. It provided a new way for Hong Kong business to improve on their service to clients. E-commerce has continuously widened its range. The paper will discuss about the growth of e-commerce. The paper will critically examine e-commerce trends and it will identify an e-commerce opportunity that can be taken advantage of.
E-commerce trend
Internet Banking
Electronic banking is one of the first things that come to mind when one thinks about the future of banking. It includes automated teller machines (ATMs), automated call centers, digital cash, Internet banking, screen telephones, and so on. These channels of delivery can be used for presenting and paying bills, buying and selling securities, transferring funds, and providing other financial products and services. In 1999, only 20 percent of the largest national banks offered Internet banking services (Gap, 2003).However, they accounted for 90 percent of the national banking system assets. Few very large banks were the most active in offering Internet services. These banks served a small but growing number of their customers (Gap, 2003).The low percentage of customers and the modest cost of setting up an Internet banking web site make it unlikely that Internet banking is having a major influence on the profitability of most institutions, with the exception of the largest ones (Gap, 2003).
This may help to explain why some small banks, particularly new banks, are unprofitable. Those banks that rely primarily on Internet banking must absorb the full cost, making that cost disproportionately large when compared to that of the large banks (Gap, 2003). Although virtual banks can provide a wide range of financial services, they are at a disadvantage compared with brick and mortar banks when it comes to customers making deposits and withdrawing cash which raises the issue of convenience. Nevertheless, advocates of Internet banking claim that it is faster, better, and cheaper than brick and mortar. Four basic characteristics are quite unique to e-banking and help to explain why it has become such an important part of the banking strategic planning process. First, the customer has anonymity when making transactions over the Internet, forcing banks to find methods to authenticate who the users are (Gap, 2003).Speed of transactions, access to global markets, and strong reliance on third parties to develop and maintain the technology-based systems are the other important components of e-baking’s popularity and success.
In addition, e-banking is made up of a broad category of systems and devices, including one of its first and perhaps most common forms that include credit and debit card development (Gap, 2003). Unfortunately most customers do not want to totally relinquish use of the branch and phone. Thus, banks have been unable to close as many branches as they had originally anticipated. Added to this is the cost of hiring technologically astute personnel capable of running the more advanced operating systems, not to mention the need for additional advertising promoting the Internet banking system (Gup,2003). E-banking provides clients with the capability to do business with a Hong Kong bank even after working hours and the clients can do it in places they deem comfortable to use the computer and the internet. In this e-commerce trend no specific software is needed by the client in operating the internet banking technology but there are major risks in terms of security of the information divulged by the client since the internet can at times be prone to attacks and hacking.
Secure electronic transaction
The combination of technology and commercial self-interest is normally able to overcome most problems and so it is likely to be with delivering the above requirements. The first development to provide a technical foundation upon which electronic commerce can be built is reaching the point of entering widespread implementation. The Secure Electronic Transaction specification (SET) has been created to define the way that credit card transactions will be processed (Stroud, 1998). Unless the consumer is convinced that they can entrust their personal credit card information to be transmitted via the Internet it is unlikely that electronic commerce will move beyond first base. If someone were selecting a group of companies to devise and implement a standard for processing credit card transactions via the Internet then a consortium including MasterCard, Visa, American Express, IBM, Microsoft, Netscape and the other major payments and computing companies would be a good starting point (Stroud, 1998).
These companies have declared their support for the SET standard. By creating a set of standards that are open to any organization to use it has been possible to stop the processing of credit card transactions from becoming an element of competition. Ensuring electronic commerce becomes a reality far outweighs any of the short-term competitive advantage that a single company might gain from creating a proprietary standard. The purpose of SET, as described in the official specification, is to provide confidentiality of information, ensure payment integrity and authenticate both merchants and cardholders (Stroud, 1998). Any information that is transmitted must remain confidential and only be accessible by the intended recipient. SET provides the standards for encrypting the transaction to retain its confidentiality. The content of any transaction must remain unaltered during transmission. By using the SET standards to produce digital signatures it makes it possible to detect if any part of the message has been changed. Merchants need to be able to verify that a cardholder is the legitimate owner of the payment card account number (Stroud, 1998).
In the same way the cardholder must be able to confirm the identity of the merchant and be confident that they can conduct the financial transaction in a secure manner. SET provides the standards to generate ‘electronic certificates’ to authenticate the identity the members involved in the electronic transaction. There must be a wide range of devices capable of processing electronic commerce and no one type of hardware or software should be particularly favored. The SET standards must be capable of being implemented over a wide range of electronic devices (Stroud, 1998). SET is an e-commerce trend that provides a secure transaction over the internet. SET makes use of various techniques that helps in making sure that HK clients and businesses have the ability to identify themselves and conduct business transactions in a secure way. SET makes sure that the information sent from one person to another person will be done in the safest and most practical way possible.
Electronic Learning
A critical component of a business or academic organization’s distance learning imitative, an electronic learning environment is a distributed network system, a corporate electronic campus, where knowledge workers and learners gain and share information from and among each other. It typically and most currently employs digital media, such as multimedia and hypermedia for Web-based knowledge transfer and Web-based training to provide an enterprise-wide knowledge management system for all of the employees within the organization, whether they are located in Tennessee or Tibet. Within a corporate electronic learning environment, interactions occur between experts and novices across multiple locations over a wide access information and communicate with each other via chat, e-mail, and mail lists (Leonard, 2004). Often an important component of the electronic learning environment is a digital library, where the knowledge objects of the organization are stored. Within current knowledge management circles, enterprise-wide learning is a much-touted, much-repeated reference to building a Web-based knowledge transfer system, to building an electronic learning environment that promotes business transformation, organizational learning, and the achievement of a state of corporate Meta cognition (Leonard, 2004).
Through agents, electronic performance support systems, and other just-in-time training approaches, organizations can move from the industrial age educational paradigm to the digital age educational paradigm. With the advent of the Internet, organizations can now build and maintain a distributed network system for enterprise-wide learning, which includes a digital library that contains multimedia and hypermedia components to support the learning organization. As such, organizations create an infrastructure for a virtual learning environment that is used by internal employees, customers, and even the public, while being entirely separate from the brick-and-mortar organization. With the rise of the digital economy and the Web, organizations are better able to disseminate and share information within and outside of the corporation on a global scale by means of the knowledge base (Leonard, 2004).
In so doing, these organizations become more cognizant of who they are and who their customers are. They achieve a state of Meta cognition. Knowledge managers, industry trainers, and school educators are focusing more and more of their attention on the evolution of knowledge objects from analog to digital, from paper-based information to electronic information that is indexed and cataloged in order to facilitate knowledge sharing by means of the corporate knowledge base (Leonard, 2004). Through electronic learning system HK business can acquire the information they need about a certain product. Aspects of the business located in places that are far away from the main branch can use the electronic learning to gather the information they need from the main branch for them to use in their daily operations. E learning also provides additional information and skills to employees from different branches and it assists in making business operations be done in the fastest way possible.
Opportunity of E-commerce
Companies can determine which elements of e-commerce are core to their business strategy and often keep these elements from becoming commoditized. Most companies may find some low-value processes to be potential candidates for commoditized e-commerce solutions. Many hardware and software packages have come into the market recently to help with the transition and maintenance of e-commerce. However, companies should not rely on these purchases for their e-commerce solution. Businesses with significant e-commerce aspirations must continually reevaluate the efficacy even of previously implemented e-commerce solutions (Epstein, 2004). They must determine whether or not newer e-commerce solutions might better fit the firm’s e-commerce strategy and whether or not the company might be better served by an in-house replacement for the commoditized solution. Without such considerations, companies run the risk that commoditized solutions will dictate their business structure, by limitations in design. Some have argued that the short-term advantages afforded by technological advances and unique uses of technology are not worthwhile, as they can easily be copied at a lower cost at a later time. However, such short-term advantages are often important for market positioning (Epstein, 2004).
Although other companies may be able to mimic such advantages, waiting for the technology to reach an acceptable price level permits the first mover the opportunity to further establish itself with its customers, thereby turning a short-term advantage into a longer-term customer base. The long-term advantages afforded by unique uses of e-commerce are less dependent on finding uses of technology that could potentially benefit any similar company in the market. Rather, long-term advantages are derived from finding unique applications of e-commerce to the company’s specific business strategies (Epstein, 2004). The e-commerce strategies of companies such as Dell, Cisco, and Wal-Mart are known to the business community. However, their long-term success has not relied solely upon e-commerce. Rather, their previous business strategies were already uniquely suited to the advantages they were able to derive from e-commerce (Epstein, 2004).
Not many e-commerce success stories have relied entirely upon commoditized solutions. It is the ability to recognize the complexities of the opportunities, and the threats, afforded by e-commerce for their business that has enabled some companies to excel at e-commerce. E-commerce opportunities, while numerous, need to be tailored to the strengths and weaknesses of particular company characteristics (Epstein, 2004). E-commerce can still be improved for it to provide better services to clients from Hong Kong. E-Commerce can use more precautionary measures to ensure that people in Hong Kong who use it will be sure that information they divulge will be kept private. Hong Kong businesses who use e-commerce should be protected from hackers that intends to gather data they can abuse. Through an improved internet system the hackers cannot gather information.
Conclusion
E-commerce is the technology that is creating various changes in the environment. E- Commerce provided a new way for Hong Kong business to improve on their service to clients. In e-commerce business can be transpired without personal meetings or conferences of the buyer and the seller. In e- commerce paying can be done through the use of the internet and no personal relationship is needed for it to prosper. E-commerce is something that is constantly evolving. As time goes by E-commerce is changing its different techniques in providing service to the clients and in making business transactions be done in the shortest time possible.
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