1) Comparisons of electronic shopping incidence in different parts of the world.
The study conducted by Nielsen Company in 2008, shows that more than 85% of the online population in the world is using the Internet in order to make purchase, and more than 50% of these users made more than one purchase. On the other hand, South Korea gained the number 1 position in the list of the top countries that made the most online purchases (See table 1 for the complete list)
Table 1 Top Countries in Online Shopping
Country
%
South Korea
99
United Kingdom
97
Germany
97
Japan
97
Egypt
67
Pakistan
60
Philippines
55
The said number had increased compare to last year, where in South Korea gained 79%, followed by UK with 76% and Switzerland with 67%. In 2008, US gained a total of 94%, showing great increase, from 57% in 2007.
Among the categories and list of products and services, the most popular are: books (41%), clothing, accessories and shoes (36%), videos/DVDs/games (24%), airline tickets (24%) and electronic equipments and gadgets (23%). In terms of payment, credit cards are considered as the most popular payment method with 60%. More than half or 53% of those credit card payers use Visa, while PayPal was chosen by 1 out of four consumers.
There are 3 factors that impact the electronic shopping in the world. First is that, electronic retailing is dependent on telecommunication infrastructure, mainly in the broadband network, because of its need for security. As a result of the effort of the government to invest in telecommunications infrastructure, it helped to make the Internet readily available to huge percentage of populations. Second, is that the incidence of electronic retailing will be affected by the extent to which a nation is developed, because developed economies are more dependent on services and characterized by larger discretionary income given higher per capita. As a result, developed countries have higher incidence of electronic shopping, while developing economies have lower rates. Above all, consumers are more likely to exploit electronic shopping from retailers that already established market presence. As many such firms exists in development economy, it is more likely that individuals in developed economies will be inclined to purchase products electronically from home grown retailers, thus, developed economies are more likely to provide greater security regarding the consumer rights and Internet privacy.
2) Discuss which products and services are more likely to be sold on the Internet.
The Internet had become one of the most powerful marketing tools. The trend encompasses the issues of quality, speed-to-market, flexibility, innovation, networks, customer service as well as customization. That’s why, certain products and services appear to be more suitable for online sales, while other remains to be more suitable in traditional trading. Products which are less saleable over the Internet are those which have low value-to-weight ratio and those that generally require smell, taste and touch component as well as color integrity requirement. The following are the most saleable products and service online:
Products
· Books
· Digital products including music, movies, videos and games
· Computer hardware and software
· Autos and auto parts
· Apparel, accessories and footwear
· Cosmetics and fragrances
· Pet supplies
· Clothing
Service
- Financial Transaction
- Travel Services
- Subscription
There are three main reasons why these products are more likely to be sold on the Internet. First is that, products are relatively homogenous that they can be readily compared in price across the providers and not usually tailored to individual needs. Second is that, the products are subject to price elasticity in purchasing decisions, thus consumers are likely to purchase these products on the basis of cost advantages. Above all, these products are readily comparable with the identical products available through established bricks and mortar retail firms, which enable the consumer to review or experience the products in retail stores before purchasing them, at presumably cheaper price, by electronic way.
Reference
Market Intelligence Center 2008, Nielsen Online Survey January 27. 2008, viewed 19 January 2009, <http://www.marketintelligencecenter.com/articles/5178>
Nielsen 2005, 627 Million People Shopping Online Worldwide, 325 Million Made Purchases in the Last Month, viewed 30 January 2009, <http://au.acnielsen. com/news/20051024.shtml>
Nielsen 2008, February 2008: Trends in Online Shopping: A Global Nielsen Report, viewed 30 January 2009, <http://au.nielsen.com/site/documents/GlobalOn lineShoppingReportFeb08.pdf>
Credit:ivythesis.typepad.com
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