Hemis Number: [123456]

Number of Words:[1671]

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Impact of E-Commerce Businesses in the UK Impact of E-Commerce Businesses in the UK

Introduction

E-commerce is one of the fastest growing business trends in the world. E-commerce is adopted in two forms:

B2B (business to the business) model, which uses World Wide Web for exchanging information and business transactions

B2C (business to consumer) trading model, where firms deal directly with their consumers through online selling and purchasing

Online, e-commerce trading includes a number of products and services such as insurance, holidays, CDs, books and others. Most of The businesses have developed their own online presence (official website) to deal with customers. The best characteristics of online trading are the broadness and reach of the internet, which allows the company to deal with wide base of customers. The cost of online trading is also less than that of other businesses.

The UK businesses have also adopted the e-commerce and today the internet economy of the UK is considered one of the most developed and progressive in the world. Many industries have been affected by the e-commerce, and today most developed companies use e-commerce channels in their tradition business models (BCG 2010, pp.12).

Literature Review

The E-commerce revolution has changed the face of business across the globe, and the same is true for the UK. Since the internet and e-commerce was adopted by the British businessmen, the concept has taken over nearly all industries. Today, the UK has one of the largest per capita e-commerce markets, as well as, one the largest online advertising market. The British economy has added another dimension to its wealthy status called the internet economy.

In 2009, the e-commerce contribution to the UK economy was around 7.2% of the GDP, equal to around £100 billion. Today, the UK is one of few net exporters of e-commerce services and products, with estimated exports of £2.80 against an import on £1. Consumption is the main driver of the United Kingdom e-commerce. The share of E-commerce to the UK economy is greater than that of utilities, transportation and construction industries (Bcg.com 2010, pp.7).

In my opinion, the significance of e-commerce to the British economy is far greater than what is perceived from these numbers. GDP is not an ideal tool and does not capture every important business and consumer activity. GDP calculation does not capture the commercial activities like B-2-B e-commerce, which is estimated to be around £350 billion/year. Other ignored activities include productivity improvements and online advertising, estimated to be valued at £3.6 billion/year.

Online product purchase is a benefit for the consumer, which is done through online research and contributes around £40/year. Consumers also save money with shopping online and through purchase of free items.

I believe that internet activity in the UK is at par with other developed nations. However, the strength of e-commerce is different in different regions with the UK. The UK e-commerce is considered developed in online advertising and sales, which has changed the way firms advertise their products. Region-wise, London leads in internet activity, followed by East ...