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To analyze the effect and assess the impact of ecommerce on business activity

The Internet has become an important part of business activity. Dozens of Internet-only companies have surfaced in many industries and numerous conventionally operated companies have adopted the Internet (Yang et al., 2004). The fresh boom in e-commerce and online shopping has left traditional retailers in a quandary about how to sell - or where to advertise (Connon, 2006). The internet has become a truly interactive medium and consequently, is opening new avenues and opportunities for organizations. E-commerce is gaining momentum in different industry sectors and its specialty lies in the fact that its business is conducted on the internet which is an 'anytime-anywhere' medium and gives organizations a chance to transact for 24 hours a day with little extra cost (Aditya, 2001; pg 736). One of the reasons for the rapid surge in e-commerce can be attributed to change in consumer buyer behavior. Research done by Eatock (2002) revealed that consumers are tempted to spend more on when they shop online and there are systemic differences in consumer choice behavior between internet and regular shopping. The research is valid even today because differences in online and regular shopping behavior still exist. People still hesitate to buy items like clothes etc online.  There are some exceptional examples of online companies like Google, Yahoo and Amazon which have grown to become major global brands in their own right. These companies are purely online companies (e-commerce) and sell their products solely on the internet while others like Tesco, Marks and Spencer etc have successful online operations, but their online operations only supports their regular operation. Sales from formed 24% of the total revenue. (Tesco Company Reports, 2007)


Ecommerce has been largely successful for organizations like Tesco which integrate their online and offline marketing activities and makes sure that its online activity is not viewed in isolation. For organizations like Tesco and Marks and Spencer, online marketing generates demand for its offline channel and visa-versa. Similar research carried out by Datamonitor (2006) revealed that retailers of high value goods report that people who visit their on-line store are much more likely to buy in a high street store, and are better informed about their requirements, having already researched the products on the web.

Ecommerce has had a significant impact on business activity, in terms of promotion, advertising and sales channel. It has also helped organizations to reduce their cost of acquisition as internet is a much cheaper medium and has a wider reach. Although, the effect of ecommerce on business activity varies according to the business sector, size, customer base and product range.

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