Business Research Practices
The obstacle of development of E-commerce in Bangkok
CHAPTER TWO
LITERATURE REVIEW
2.1
Introduction
In the past, the traditional way of doing business worldwide was through
paper-based commerce. However, in the digital era everything in life has been
connected through electronics. The way we conduct business is changing as a
result.
Moreover, to survive in the digital economy, businesses all over the world
need to adopt new business model. This new business model is based on the
application of new information technology, especially the Internet to handle
business electronically. The new business model, known as e-commerce, has
been widely implemented by most advanced corporations all over the world.
2.2
Concept of E-commerce (EC)
E-commerce is the use of computer networks or the Internet to
communicate, negotiate and perform business transactions between two or
more parties electronically. This new medium is allowing companies in different
parts of the world to contact each other and conduct business at any time
Basically, e-commerce can be divided into three categories: business-tobusiness, business-to-customer and business to government. Among these three
types of business models, business-to-business e-commerce is the most
significant, because it has already generated a substantial amount of revenue
for the world’s business Today e-commerce is becoming one of the most
popular business practices all over the world. This popularity is because ecommerce can generate strong results in three ways. E-commerce can help
increase revenue through new market channels, reduce costs and general
administrative expenses. For many businesses, marketing expenses have also
been lowered. Most importantly, asset-intensity reduction has also been
generated such as lower costs of goods sold and increased working capital
turnover.
Generally, products and services sold over the Internet can be classified
in three genres. The first type is soft goods (Digital products) such as software,
video and songs. The second type is hard goods (Non-digital products), for
example, garments, jewelry, ornaments and toys. The other one represents
varied services such as hotels and travel for business, but especially for tourism
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Business Research Practices
2.3
The obstacle of development of E-commerce in Bangkok
The Enactment of E-commerce Related Laws to Protect Both Sellers and
Consumers.
There are several laws launched for both seller and buyer protection.
For instance, the computer crime, the intellectual property right, and privacy
data protection laws have been enacted. This can encourage both buyers
and sellers to have more confidence in getting involved in electronic business.
2.4
Procedures Relevant to Security System Are Developed
To handle security, a certification authority was created.
Certification
authorities will manipulate digital “key” that authenticate the identity of each
party participating in a networked transaction.
This helps create more
confidence in on-line business transactions for customers.
2.5
An Overview of E-commerce in Thailand
In Thailand, despite the fact that the concept of e-commerce came to
Thailand several years ago, actual e-commerce implementation got started just
in 1999. During 1999, there were several e-commerce-related pilot projects
launched by both government and private organizations. Many business
companies participated in the new on-line trading method.
The Commerce Ministry has been regarded as one of the first
governmental agencies to encourage local business to engage in this new
electronic commerce arena. With the launch of the first e-commerce pilot
project, local manufactures will be able to deliver Thai products on-line to the
global market. Customers from around the world will be able to order any Thai
products desired through the Internet.
In the private sector the tendency towards e-commerce lays within
financial institutions and will probably also move towards future business-tobusiness e-commerce development. Most of Thai banks allow customers to
make electronic payments by using a credit card on the Internet.
In conclusion, the development of e-commerce in Thailand has been
progressing, it tends to grow every year. This is because on-line trading is
becoming a popular trend among a new generation as well as older people
who love getting involved in new technology.
2.6
Security System
Internet security system is the issue of greatest concerns for e-commerce
nowadays. In doing on-line business, the lack of a good system for consumer
privacy data protection causes people to be unwilling to participate in ecommerce. They hesitate when dealing with e-merchants particularly when
asked to provide information to web sites.
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Business Research Practices
The obstacle of development of E-commerce in Bangkok
Presently, a major concern for e-commerce is the threat of hackers who
try to break computer security system to discover sensitive information.
Sometimes, the personal data may be made fraudulent by hackers as well.
Recently, there have been several reports of hackers stealing credit card
numbers of Thai consumers from international e-commerce sites. This causes
people not to have confidence in doing on-line business transactions.
Another hindrance is a lack of a trustworthy organization to operate as
a mediator between vendors and purchasers in the electronic trading system,
or a so-called certification authority. This void has caused people to lack
confidence in trading on-line. In dealing with on-line business, both sellers and
buyers may never have any contact before. Trust must be built. A certification
method is critical to all processes.
2.7
Legal Obstacles
Legislation related to e-commerce is regarded as a key foundation since
e-commerce is a new method of conducting business. Companies need a legal
framework to conduct all their transactions through the new electronic medium.
In addition, legislation will serve as a legal infrastructure that will enhance the
confidence among the members of the electronic transaction “playground”
while providing rules and etiquette for fair play.
In the past, local people did not accept the use of electronic commerce
in businesses. The main reason was the lack of laws and regulations to
guarantee the security of information transmitted over the electronic networks.
Presently, the government sector has put a lot of effort to work out and enact ecommerce laws.
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