FREE online courses on ECOMMERCE FUNDAMENTALS - What is E commerce - Electronic markets

Bakos defines an electronic market as, “an interorganisational system that allows the participating buyers and sellers to exchange information about prices and product offerings”.

 

Klein and Langenohl state that electronic markets involve: “The totality of exchange relationships between market participants with potentially the same rights. All interaction processes between the actors are supported and automated by an electronic market system - at least to the completion of the trading/matching phase”.

Tensions in the market

 

E-commerce sets up two related tensions in the marketplace.

 

·         First, even though much electronic business will continue to be transacted in domestic markets, E-commerce is difficult to contain within geographically defined trade areas and frontier-based regulatory and administrative regimes.

 

·         The second tension concerns the ‘intangible' nature of many goods and services in an E-commerce environment.

 

For non-electronic transactions in a ‘material' product environment, the source of a product, the locations of its suppliers and distributors and the respective responsibilities and liabilities of the buyer and seller can be verified relatively easily. On the other hand, intangible transactions blur many of the existing distinctions between domestic and foreign business and between on-shore and offshore transactions.

 

Impediments

 

·         Probably the most troublesome conceptual aspect of E-commerce is that it can be very difficult to define the location at which a transaction actually takes place and hence the jurisdictions to which it may be subject.

 

·         For E-commerce to thrive in a commercial environment governed by the principles of open markets and free trade, participants in a market must be able to exchange commercial data freely across national boundaries, confident that there will be no unauthorized access to this information.

 

·         In the electronic world, the concept of an ‘original' document is problematic, but a ‘digital signature' using cryptography can verify data integrity and provide authentication and non-repudiation functions to certify the sender of a message.