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Journal of Electrical and Electronics Engineering35 Electronic Commerce - a Modern Form of Business cue Sunhilde', KANYA Hajnalka^ ' University of Oradea, Romania,Faculty of Textiles and Leatherworks, B. Çtefànescu Delavrancea, nr 4410058, Oradea, E-Mail:
[email protected] ^ Universitatea Crestina Partium, Romania,Facultatea de Stiinte Economice,Str. Primariei nr. 27,410209 Oradea, E-Mail:
[email protected]: Abstract - In the last years, the Internet has known animpressive evolution, having a major impact on allaspects of life. This paper presents a short review of theliterature on e-commerce, the main models, and thestatus of e-commerce existing in Romania. Asconclusion we can affirm that electronic businesses,electronic commerce is developing in Romania, andRomanian organizations must face the challenges ofthe new economy, must search the opportunitiesoffered by the Internet, in order to assure their successand future. The study might serve as a starting pointfor further research in e-commerce in Romania.Keywords: e-commerce, e-business, online marketing,Internet, Internet based technologies I. INTRODUCTIONA common defmition of the electronic commerce (e-commerce) underlines that it is the management of thecommercial activities using electronic equipment andthe possibilities offered by these in order to increase thearea of communication and information of the clientsduring their partnerships with different producers andintermediaries. In a wider sense electronic commerce isthe electronic change of information between businesspartners. [1]E-commerce is considered as exchanges betweenimplied parts (individuals, organizations) mediatedthrough technology, supported by internal activities orbetween organizations through electronic means. [2] Thedefmition offered by the Information Society ProjectOffice of the European Council underlines thetechnological aspects of the electronic commerce, aselectronic commerce is deflned as any form of businesstransaction, during which the implied partners interactmostiy in electronic way, and not physically or directly.Electronic business (e-business) is a wider notionthan the electronic commerce, it refers to howbusinesses are managed electronically, and usingInternet based technologies. During electronicbusinesses the organizations interact with their clients,suppliers and intermediaries and other partners (forexample banks, governmental organizations, localauthorities etc.) using the Internet based technologies,and of course internal operations are managed alsoelectronically. [3] E-businesses represent the use ofinformation technologies in the internal processes of thebusinesses, while they are implied in commercialactivities. [4]E-commerce includes electronic presentation of theproducts and services, online acceptation of orders andpayments, getting automatically information about theclients' accounts, online payments, automaticallysupplying of management solutions.Electronic mobile commerce is defmed, ascommerce using wireless means, like mobile phones,digital personal assistants etc., which assure wirelessconnection to the Internet. [5]Digitalization and connectivity are those phenomenathat represent the base of the electronic conmtierce.Digitalization - refers to the possibility of transformingelectronically in bites pieces of text, data, sounds,image, and sending it in big quantities and rapidly froma computer to another. Connectivity - using computernetworks it becomes possible the electronic dataexchange, electronic commerce, electroniccommunication between people, partners, organizations(these networks can be: intranets, extranets, intemet).[6]Results of different researches show an increasingtendency of the amount of money spent online byInternet users, which show the development of theelectronic commerce. [7]The Worid Wide Web or simply Web is thecomponent of the Internet, which is interesting fromcommercial point of view. A lot of web pages appearconstantiy on the Web, but of course a lot of web pagesalso disappear. [8] The internet offers a lot of newpossibilities for individuals and organizations: severalelements of a transaction can be realized in aninteractive way, there are no constraints of time andspace, using multimedia tools voices, images and textcan be sent, relatively at lower costs (which arecontinuously decreasing). Due to these advantages theInternet is a polyvalent and useful tool for e-commercein comparison with other tools. These tools can becombined in different ways between them or with othertraditional tools (like postal services, traditional selling 36 Volume 4, Number 1, May 2011 in shops) in order to increase the effectiveness andefficiency of the electronic commerce. Thus the Internetreduces much more the barriers in communication andcommerce in comparison with other tools of theelectronic commerce or traditional commerce.The e-commerce has an important impact on theeconomy as it transforms the traditional market and wayof doing businesses, reduces the distance between theseller and buyer, facilitates the rapid dissemination ofthe changes in economy, increases economicinteractivity, reduces the importance of the time,facilitates globalization. [9] Electronic Commerce Models In e-commerce there exist different kinds oftransactions: B2B (Business to Business - transactionsbetween organizations), B2C (Business to Consumer -transactions between selling organizations and theirconsumers), B2A (Business to Administration -transactions between organizations and publicadministration organizations), C2C (Consumer toConsumer - transactions between individuals), A2C(Administration to Consumer - relations between publicadministration organizations and citizens), etc.[10]B2B represents the most widespread electroniccommerce and electronic transactions betweenorganizations included, called IOS type (Inter-organizational Information Systems). There is severaltypes of inter organization systems: electronic datainterchange (EDI - Electronic Data Interchange) valueadded networks (VAN - Value Added Network),electronic funds transfer (EFT), Extranet sites securelyconnected to the Internet, EDI combines integratedmessaging, email and electronic forms, databases sharedextranet sites, supply chain management (supply chainmanagement). Products most suitable for B2B trade inorder to use them are: computers, computer components,consumer electronics (17.5%) public services (5.7%),transport and storage of goods (2%), motor vehicles (2%), petrochemicals (2%), paper and office supplies(0.7%), food and agriculture (0.4%). [11]B2C trade is a series of specific products, top sellingretail products on the Internet the following structure:travel, IT software and hardware, grocery, books,apparel and accessories, tickets, gifts, music, toys,electronics etc. There exists an increasing tendency ofthe financial transactions on the Internet: stock-markettransactions, banking operations, insurance policies. [6]There exist different tendencies all over the world inorder to develop e-commerce, and according to thistendency different countries adopt specific measures tocreate and develop the information society of thecountry, because the state of the development of theinformation society infiuences the development of the e-commerce. It seems that the United States of America,and other states of North America present advantages inthis field.The European Commission launched the e-EuropePlan [12] in 2000 in order to develop the informationsociety in the European Union, and continuously revisedand renewed this plan, establishing different prioritiesregarding this problem, for example increasing theinvestments in information and cotnmunicationtechnologies, eliminating the digital gap between Europeand USA regarding the access of organizations andpeople to the online operations, etc. It was considered asuccess of this plan that at the end of 2002 in theEuropean Union 50% of the inhabitants used the Internetregularly, and 90% of the schools and organizations hadnon-stop Internet connection. The necessity ofdeveloping such a plan was evident because thereappeared regional differences in informationinfrastructures of the different countries of the EuropeanUnion. In order to solve these problems the EuropeanUnion invested 10 billion Euros in order to develop theinformation infrastructure and technologies, and ofcourse to develop the e-commerce.Through the following e-Europe 2005 Action Planit was considered as important aspects the foUowings: tocontinue the development of online access to the publicservices for the people and organizations, to diminishthe regional discrepancies between different groups ofinternet users, to encourage and support the use of 3Gtechnologies, to promote the use of informationtechnologies and electronic commerce by small andmedium sized companies etc. [13] After finishing theimplementation of this Action Plan it was developed the Í2010 Initiative to facilitate the improvement ofeconomy, society and personal quality of life usinginformation and communication technologies.[14]The Europe 2020 Strategy was launched by theEuropean Commission to offer guides for facing thechallenges of the economic crisis and to prepare theeconomy of the European Union for the next future, andthis emphasizes the necessity of smart growth , sustainable growth and inclusive growth , includingthe components linked to the development ofinformation society and electronic commerce in thecountries of the European Union.[15]n. ELECTRONIC COMMERCE IN ROMANIARomania is part of the European Union, as a resultconsiders important the development of the informationsociety. In Romania it was developed the InfosocProgramme in order to stimulate and support thedevelopment of the Information Society in Romania.This programme was correlated to The National Strategyof Economic Development of Romania, to Thé NationalStrategy of Informatization.The e-commerce is developing in Romania, too, butaccording to a study published in the EuropeanCommission, the Information Society in Romania is stillin its early stages, but it is showing an accelerated trendof development and modernization. [16]Romanian companies and companies from othercountries offer their products and services to RomanianInternet users. In the past ten years the percentage ofInternet users in Romania has increased 10 times. Journal of Electrical and Electronics Engineering 37 ranging from 3.6% in 2000 to 35.5% in 2010 [17]. Despite this growth, Romania is in the last position in the European Union in terms of Internet users, 35.5 percent of placing it far below the EU average by 67.60% [18] and only 21% of Internet users in Romaniaby going online every day or almost every day, compared with 53% average for the EU [19]. Tabell. Internet Usage in Romania comparative with the WORLDREGIONEU Romania Rest ofWorldrOTALWORLDPopulation( 2009 Est.)489,601,562 22,215.421 6.278.203.6466.767,805.208 Pop. ofWorld%7.292.8100.0Internet Users. Latest Data319,393,400 7,430.000 1.482.435.111 1.802.30.457 'enetiation ã(% 'opulation)65.3 33.4 23.626.6UserGrowth (2000- 2009)238.9 828.8 456.1399.3UsersofWorld%17.782.3100.0 Source: httD://www.mtemetworldstats.com/stats9.htmtteu Regarding the use of the internet and e-commerceservices in Romania there exist some specificcharacteristics: the number of internet users is low in comparison with other countries from the EU (even if there exist an increasing tendency in the number of internet users), the access to the internet is unsafe and unstable, the income of the population is low, there exista lack of trust in internet services, in electroniccommerce services and especially in electronic paymentservices, the grade of credit/debit card uses is low, the legal frame does not facilitate properly the developmentof electronic commerce.As the Internet continues to grow in popularity as a place to transact business, the issues of trust and credibility are brought to the forefront. E-commerce,unlike traditional commerce involves various risks(product performance, delivery, credit card information,etc) that consumers perceive as risky for an onlinetransaction.The lack of knowledge in the use of computers,Internet and e-commerce can be also major problemshindering the use of IT from the Romanian consumers.Studies also have found that knowledge and skillsgained through experience of using the Internet and computer helps to reduce consumers' perceived risk in online shopping [20]. In order to facilitate the development of the electronic commerce in Romaniathere is a need of creating a proper infrastructure, of extending the Internet access of the population, of developing the digital culture of the inhabitants.There exist a lot of companies that offer Internetaccess services in Romania for individuals and organizations. Some of them offer other services relatedto the use of Internet, too. There exist companies thatoffer software products for electronic businesses, for electronic commerce. In Romania the B2C (Business to Consumer) sector of the electronic commerce is moredeveloped than the B2B (Business to Business) sector,and the G2C (Government to Consumer) and B2G (Business to Government) sector is not very developed,but is developing gradually [21].E-govemance is a broader concept that deals with thewhole spectrum of the relationship and networks withingovernment regarding the usage and application of ICTswhereas e-government is limited to the development of online services). It is an institutional approach to jurisdictional political operations where as e-govemanceis a procedural approach to co-operative administrativerelations, i.e. the encompassing of basic and standardprocedtires within the confines of public administration [22] .Regarding the online presence of the authorities,they are invisible for more than four-fifths of internetusers in Romania. Thus, less than 20% shall inform the authorities' official sites, far below EU average, whichexceeds 50% [23].To streamline the tax system and ease access fromthis specific information Romania will be developing a dedicated system impact of business and governmentinstitutions will be based on the concept Access onlythrough a single point to digital information of interestin Romania e-Romania web portal[24].In Romania generally are used virtual shops in orderto present the companies' offers related their productsand services (where internet surfers can place ordersonline, filling an online form), but of course we can finddifferent other business models, too. A studycommissioned by ANC and realized by RomCard to evaluate e-commerce market in Romania in 2008 showsthat the number of online stores in Romania willcontinue to increase by 50% annually in the 2009-2011period, reaching up to 3,000 stores that will carryfunctional activities of commerce via Internet The e- commerce has an ascending growth rate, ending the firsthalf of 2009 with 570,000 transactions and a totalvolume of 43.5 million euro, up 68% from the sameperiod last year, according to RomCard [25]. Half of online stores are located in Bucharest, Romania (49%),and some counties have decided to compete in electroniccommerce: Cluj (5%), Brasov (4%), Tinüs (3%), U.S. (2.5% ), Bihor (2%) [26].Romania ranks fifth in the Central Eastern Europeanregion in terms of Internet users, but ranks second to lastbased on the value of the online advertising market per user, according to a recent study issued by IAB Europeand Geniius Research. The Romanian onlineadvertising market reached EUR 15.3 million in 2009with only EUR 2 of online advertising spent per user.The amount of online advertising spent per user in Romania was higher than in Belarus, where the onlineadvertising market was of EUR 4.3 million in 2009 and the amount spent per user was of EUR 1.4. The highestonline advertising spending per user was recorded in the Czech Republic, of EUR 48. There, the onlineadvertising market was of EUR 250 million in 2009[27].Regarding online payments we can affirm that in Romania this is not a very popular method of payment,due to the lack of trust in security of payment systems. 38 Volume 4, Number 1, May 2011 The use of debit/credit cards is not very common inpayments, neither in online nor in offline payments.m. CONCLUSIONSThe main challenges for the Romanian organizationscan be summarized as follows: the changes generatedby governmental reforms, European Union membership,changes of legal environment, reduced financialresources, needed improvements in management know-how, intensification of competition, global economiccrisis etc.As conclusion we can affirm that electronicbusinesses, electronic commerce is developing inRomania, and Romanian organizations must face thechallenges of the new economy, must search theopportunities offered by the Internet, in order to assuretheir success and future.Regarding the Romanian e-commerce, the trend is anupward one. The number of online shops increasessignificantly from year to year like the number ofconsumers who shop online, the security standards arealigned with international ones; there are also variousonline payment methods and the quality of products isgenerally high.The electronic commerce development depends onthe evolution and overall quality of telecommunicationnetworks and the equipments that are connecting to it. Inmany countries the state of telecommunication systemscannot yet develop advanced digital networks.REFERENCES[1] Oprean, Victoria - Oprean, Dumitru: Mécanismeale comertului electronic (con^inut ci arhitecturi). TRIBUNA ECONÓMICA. Nr. 12/2003, p. 42.[2] Rayport and Jaworski cited by Gay, Richard -Charlesworth, Alan - Esen, Rita: M@rketing on-line - o abordare orientatä spre client. Editura All,Bucureçti, 2009, p. 5.[3] Eszes István - Bányai Edit: Online M@rketing. Müszaki Könyvkiado, Budapest, 2002, p. 105.[4] Philips cited by Gay, Richard - Charlesworth, Alan- Esen, Rita: M@rketing on-line — o abordareorientatä spre client. Editura All, Bucureçti, 2009, p. 5.[5] Gay, Richard - Charlesworth, Alan - Esen, Rita: M@rketing on-line - o abordare orientatä spreclient. Editura All, Bucureçti, 2009, p. 6-7.[6] Kotier, Philip: Managementul Marketingului, Editura Teora, Bucureçti, 2002, p. 975.[7] For example in www.emarketer.com cited bywww.e-kereskedelem.hu/news.php?id=3531[07.10.2003][8] Janal, Daniel S.: Online Marketing Kézikonyv. Bagolyvár Könyvkiado, Budapest, 1998, p.l51. [9] www.crie.ro/nouaeconomie/srl51-impact-VD.html[08.04.2003] [10] Gay, Richard - Charlesworth, Alan - Esen, Rita: M@rketing on-line - o abordare orientatä spreclient. Editura All, Bucureçti, 2009, p. 40.[ll]Nistor C, Nistor R., Muntean M. 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Journal ofManagement Information Systems, 24, 4 (Spring2008),101-121[21] www.crie.ro/nouaeconomie/srl53-situatiaro-VD.html [08.04.2003.][22] Sheridan, W., and Riley, T.B. (2006)Commonwealth Centre for e-Govemance, e-Gov Monitor, Monday, 3 July, 2006 . [231 http://www.ires.com.ro/uploads/tuticole/ires romanii-si-internetul-2011 analiza.pdf [28.03.20111.[24] Sipica Alexandru , 2009 , The Impact ofEcommerce on SMF's , Scientific Papers Series,>lanagement. Economic Engineering inAgriculture and Rural Development [25] (http://www.izzisale.ro/Studiu-eCommerce-ANC.pdf). [28.03.2011] r261 http://www.underclick.ro/articol-4989-snec-2010-studiu-comert-electronic-romania-2010.html.[28.03.2011]. [27] Romanian online advertising spending per Internetuser, among lowest in the region,March, 2011,http://www.romania-insider.com/romanian-online-advertising-spending-per-internet-user-among-lowest-in-the-region/2129 l/r08.04.2011 ]
