E-Retailing and Logistics


 


 


Table of Contents


 TOC \o “1-3″ \h \z \u 1       Executive summary.. PAGEREF _Toc222803381 \h 1


2       Introduction.. PAGEREF _Toc222803382 \h 1


3       Analysis of the Potentialities of E-Retailing in Hong Kong.. PAGEREF _Toc222803383 \h 2


4       Samples of E-retailing inside and outside Hong Kong.. PAGEREF _Toc222803384 \h 3


5       Analysis of Structuring Retail Logistics. PAGEREF _Toc222803385 \h 4


6       Problems related to E-retailing.. PAGEREF _Toc222803386 \h 7


7       Conclusion.. PAGEREF _Toc222803387 \h 7


8       Reference.. PAGEREF _Toc222803388 \h 9


 


 


 


 


1       Executive summary

The advent of information technology have pave the way business done and it also affects the consumer behavior in some aspects. This paper discussed the potentialities of e-retailing in Hong Kong. Herein, the papers also provided information about the concept of retail logistic and also the problems and issues encountered in e-retailing.  This paper concluded that e-retailing has greater potentialities in Hong Kong market and e-retailers can do business in Hong Kong and can be successful through the use of internet and online marketing approach.


 


2       Introduction

 


            The internet are said to change how business is done in the global market. Accordingly, e-retailing is noted to be the most expensive by the most advanced marketing approach that every industry wants to apply and implement. Currently, many business industries tend to be involved in the trend of information technology to stay in their competitive position. Upon surfing the internet, different companies have already established their official sites online for different clients. Accordingly, websites have now become the most comprehensive medium for advertising reaching large group of people in the international scene (Wirtz, 2001).


            To bee able to promote their product lines, industries from large multinational companies to small local industries, are considering e-retailing to enhance their customer relations or attract potential clients.  Because of being interactive, e-retailing is also considered as an efficient method to transact business.  With the growing accessibility of the internet, people in the global market can easily access online websites or online retail stores anywhere at any time.


Primarily, the main goal of this paper is to consider e-retailing in a Hong Kong company. For this report, retail logistics will also be considered. This paper will also discuss the potentialities of e-retailing in Hong Kong market. In this report, problems and issues regarding e-retailing will be discussed. The company that will be given emphasis is a food and non-food retailing company.  


3           Analysis of the Potentialities of E-Retailing in Hong Kong

            Currently, Hong Kong is now among the nations in Asia with the highest rates of online penetration and information development. The local administration of Hong Kong has been able to show an active participation in encouraging Hong Kong people to actively support digital and information technology. For instance, in November 1998, HK government has developed a program known as Digital 21, so as to establish more suitable environment for e-retailing to prosper in the nation (HKSAR, 2004a). With this, Hong Kong people are able to easily adopt modern technology. For example, in making purchases, local clients have already become adapted to online shopping and paying through credit cards credit cards (ACNielsen, 2005). Online retailing also known as e-retailing has been defined as a process of doing business transactions online wherein the clients can place an order of the product through the use of internet technology (Li & Zhang, 2002).


            Based on these studies, it can be said that Hong Kong has a great potentials to embrace or accept e-retailing companies. In a report conducted in 2004, the result indicated that the total business receipts which have been gained from online sales amounted to HK.6 billion which shows a relative 30.2% increase in sales (HKSAR, 2004b). In Hong Kong, the most popular e-retailing store is YesAsia.com. From June to August 2004, this site as well as the Amazon.com has been able to gain the second and fifth position in the Top 10 Online Shopping Websites in Hong Kong (HKSAR, 2004b). Based  on this analysis, it can be said that Hong Kong people shows a high degree of interests, potentialities and comfort in using internet to purchase what they need online.


            Studies have shown that the admission and acceptance of Hong Kong people in terms of using the internet technology for making purchases and e-retailing is mainly because of the convenience and price factors.  In a study by Foucault and Scheufele (2002) they have noted that consumers are interested in buying online due to the high availability of the products offered. In the case of Amazon.com, the e-retail company has been able to become more appealing on millions of clients through low-priced good and effective advertising. Different internet tools that make product browsing easier are also used by the industry. In turn, the industry was able to establish a great level of consumer retaining among its patrons (Chen & Chang, 2003).


4           Samples of E-retailing inside and outside Hong Kong

            As mentioned, there are e-retailing companies that have been successful inside and outside Hong Kong. Examples of e-retailing companies include YesAsia.com, eBAy.com and Amazon.com and these retailing stores are mostly visited by Hong Kong online shoppers. Aside from purchasing products and services online, these companies tend to offer other promotional products which benefit the consumer. The study of Talaga and Tucci (2001) has noted that online purchases are typically done because of the unavailability of other products in local stores. It can be said that multi-national companies name recognition may have higher effect compared to brick and mortar industries. Degeratu and associates (2000) found that well-known e-retailing reputation name influenced favourable evaluation of the retailer’s website. YesAsia.com of Hong Kong has been successful and its success is attributed to the wide variety of products that they offer (ACNielsen, 2005).           


5           Analysis of Structuring Retail Logistics

            Accordingly retail marketing works on the aspects that direct sales is a potent factor to attract consumers due to personal interaction and negotiation, Moreover, the product is readily seen by the clients, hence, the urge to buy a product as well as the probability that it will meet the clients demand are higher. However, retailing is considered to be a complex process. Inherent are issues, problems and challenges which must be faced and solve so as to succeed in the retailing world (Blumenthal, 1994). The advent of the e-retailing have changes the way brick and mortar companies are doing their business, specifically in terms of logistics.


            Traditionally, most retail stores managed manufacturing, distribution and purchasing as a discrete business operation set. The inability to coordinate these three may lead to costly and unnecessary issues for the retail companies (Stuart, 1997).  Accordingly, the primary impact of e-retailing on the traditional aspects of retailing is to break the time as well as the location bound. Through e-retailing, the clients can place their orders, gather relative information and communicated with various industries from any place and any time. With the Internet, e-retailing has emerged and the company can more readily engage in direct communications, order taking, and technical support for their respective clients. Furthermore, the context of e-retailing for food and non-food retailing companies permits immediate and virtually free two-way communication channel with as many or as few others as needed. In line with text details, e-retailing permits audio and video communications as well which is more comprehensive than the traditional retailing approach.


            In exposing the perceived benefits brought about by e-retailing contexts and in securing competitive advantage, different industries now work enthusiastically to become a well-recognized e-retailing industries use of Internet, Lancioni, Smith, and Oliva (2000) have revealed that that more than 90% of companies that have used the Internet as part of their supply chain and retail management program.


On the other hand, the logistics concerning the retail industry is normally confronted with challenges which address speed as well as reliable delivery system of the industry.  In addition, accountability in line with service deliveries defines the success and competitive advantage of industries retailing business in which the leading trading industries strategically manage time in their supply chains (Kosteck, 1996). With this, , dealing efficiently with customers and establishing pressure to encourage rational and effective customs operations is an integral aspect of managerial skills of time management in major industries as problems of inefficiencies and irregularities in functioning of customs in different territories significantly influences the trading environment where just-in-time supplies, electronic trading and increased internationalization govern the current  trend in the industry (Tansey, 2002).


However, with the concept of e-retailing, logistics aspects are also influenced. With regards, food and non-food retailing companies, the management can be able to consider e-retailing to help them distribute their products easily across Hong Kong and other foreign companies. In e-retailing, it seeks to realize business transactions which necessitate performed financial and commercial activities through the internet.  Among the typical applications of e-retailing approach is the efficient delivery of the products purchased by the clients. food and non-food retailing companies can use their website to catch buyer’s attention.


E-retailing dealings  has been able prove that companies can provide products with higher in volume and less cash-driven in a manner that it can save time and costs of resources since the delivery charges are mostly covered in the entire package within the e-retailing concepts (Emiliani, 2000).  With the e-retailing food and non-food retailing companies can be able to consider sales and marketing promotions that may include sales coupon, rebate, and promotion package to ensure that they will attract more clients from Hong Kong and other clients in the global market. E-retailing aspect of the food and non-food retailing companies should also consider offering strong economic value by providing their clients cumulative discounts or free shipping, which aims on delivering competitive value in relatively small package sizes as well as lower tax rates over the World Wide Web.


6           Problems related to E-retailing

Despite the success of different e-retailing companies, there are still industries which are experiencing issues and problems when it comes to integrating their e-retailing process to their business strategies. One of the issues is the inability of most e-retailing companies to satisfactorily meet the needs and expectation of the clients with regards to the product that they offer. Most e-retailing companies are having problems in terms of delivery systems, and also with the quality of the products being provided. Such issues affect the trust and the loyalty of consumers to buy and purchase online goods in the e-retail stores.


In addition, other problems and issues that might be encountered by food and non-food retailing companies in e-retailing are in line with their inability communicate well with the clients. Unlike in physical stores, retailing companies can easily negotiate and communicate with their customers and can easily know the problems as it arises, however, those e-retailing industries, the management cannot easily detect the source of the problem due to the distance gap. In addition, the management may not be able to solve the issue if communication process is inefficient (Smith &Taylor, 1998). Another problem is in line with ethical consideration and privacy. There are online retailing companies that have loopholes in handling confidential files of their clients leading to major problems.


7           Conclusion

It can be said that e-retailing has become a source of competitive advantage by bestowing industries with new models to outperform or outgrow their competitors, and spawned new companies by providing more information. In addition, e-retailing has been able to evolve to encourage direct interaction between retailers and clients in markets where consumers have more complete information about products and services which enables them to exert substantial control in their market position. It can be concluded that the internet has been widely used by various people in the global market with their own objectives and clients used the Internet to access each business to inquire about products or to conduct transactions. Based on the analysis, it can be said that Hong Kong has potentials for e-retailing industries with the existence of different retailing companies that make it big and successful in the country with the use of the internet.


In line with retailing and logistics, food and non-food retailing companies in Hong Kong can have more potential if they will be able to make their business e-retailing companies because the internet is capable of marketing their products more than advertising and promoting them. Although there are challenges when using e-retailing, there are still more positive benefits than staying as a brick and mortar industry.


All in all, it can be concluded that rapid growth of the e-retailing has been one of the key aspects in changing how business is done, particularly how retail and logistics is done.  The global reach as well as the speed of delivery along with the unique features of interactivity and customization intensive the need for considering e-retailing among Hong Kong businesses. In this regard, the strategic essentialities of the e-retailing in line with communication and delivery systems in the logistics and retail is especially evident for the business companies products/services and the world wide web has been able to establish and maintain good customer interaction as well as business transactions, specifically among Hong Kong clients.


8           Reference

ACNielsen (2005, October 25). One-Tenth of the World’s Population Shopping Online: Including 325 Million in Last Month. Retrieved January 26, 2009 from http://hk.acnielsen.com/news/20051025.shtml


 


Chen, S.J. & Chang, T.Z. (2003). A descriptive model of online shopping process: some empirical results. International Journal of Service Industry Management, 14(5), 556-569.


 


Blumenthal, K. (1994). Retailing: Stores Tinker with the Hours they Stay Open. he Wall Street Journal.


 


Degeratu, A., Rangaswamy, A. and Wu J. “Consumer choice behaviour in online and traditional supermarkets: the effects of brand name, price, and other search attributes”, International Journal of Research of Marketing, Vol. 17, 2000, pp. 55-78.


 


Emiliani, M.L. (2000). Business-To-Business Online Auctions: Key Issues For Purchasing Process Improvement. Supply Chain Management, 5(4), 176-186.


 


Foucault, B., & Scheufele, D. A. (2002). Web vs. campus store? Why students buy textbooks online. The Journal of Consumer Marketing, 19(5), 409-423. 


Li, N. & Zhang, P. (2002). Consumer online shopping attitude and behaviour: an assessment of research. Eighth Americas Conference on Information Systems, 508-517.


                                                           


Smith, PR, and Taylor, J (1998). Marketing Communications – An Integrated Approach. (4th Edition) London: Kogan Page, 1998. Some Guidelines for Success. American Journal of Small Business. 12: 11-25.


 


Talaga, J. & Tucci, L. (2001). Consumer trade-offs in on-line textbook purchasing. Journal of Consumer Marketing, 18(1), 10-18.


Tansey, S.D. (2002). Business, information technology and Society, Routledge, New York


The Government of the Hong Kong Special Administrative Region (2004). Findings of the Household Survey on Information Technology Usage and Penetration and the Annual Survey on Information Technology Usage and Penetration in the Business Sector for 2004. Retrieved January 5, 2007 from http://www.info.gov.hk/digital21/eng/statistics/it_survey2004.html


 


The Government of the Hong Kong Special Administrative Region (2004a). 1998 Digital 21 IT Strategy. Retrieved January 26, 2009 from http://www.info.gov.hk/digital21/eng/strategy/strategy_main.html


 


Wirtz, B.W. (2001). Electronic Business. Wiesbaden: Gabler Verlag.


 



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