Impact of e-Commerce On Society and Businesses – Advantages and Disadvantages

ECommerce market is constantly growing and it has earned its significance in the online world.

Gone are the days when it was a far-fetched concept. Fast forward to today, eCommerce has become the new norm for online shopping. In fact, the transformative shift of eCommerce is so expansive that the market is expected to reach a belligerent 95% of all purchases performed through eCommerce.

With more and more consumers turning toward the online world and other digital platforms for convenience, eCommerce is setting the center stage for almost all shopping experiences. Businesses are now looking to build an eCommerce app to enhance their online presence and streamline the shopping experience for customers. But how exactly does impact of e-Commerce on Society and Businesses? What are its advantages and disadvantages? And how exactly is eCommerce expected to grow in the coming days?

In this article, we are going to answer a lot of your burdening questions. We will help you learn how eCommerce impacts business and society as well as discuss its advantages and disadvantages on a wider spectrum. So without further ado, let’s read everything about it.

What Exactly is eCommerce?

You may have heard the term a lot, especially when it comes to online shopping. eCommerce is a common term that often gets thrown around, especially when you’re planning to purchase good shoes, a good t-shirt, or probably a new coffee mug that you want to place on your desk.

So what exactly is eCommerce? And why do we often hear about it on a day-to-day basis? Well, commerce is all about selling/buying stuff, and eCommerce refers to electronic commerce. It’s that simple. Today, we have many eCommerce retail giants such as Amazon, eBay, and Alibaba.

The single most effective benefit of eCommerce is how it’s a traditional business model since it offers convenience, broader market access, and lower operational costs. Today, we have several business models where eCommerce can be applied; for example, B2B, B2C, and many others. Whether it’s education or financial services, eCommerce is a predominant concept. It’s almost widely accepted in almost every major industry.

How Does eCommerce Contribute to Business?

But how exactly does eCommerce contribute to businesses? Well, the short answer is…it really worked during COVID-19 and helped combat inflation. Yes, this is a fact that makes eCommerce a big deal for the industry. It leads to downward pressure on inflation by decreasing competition, reducing costs, and changing the sellers’ pricing behaviors.

For example, Carrefour traditionally relied on in-person sales, but with the COVID-19 pandemic, traditional sales saw a significant decline, which led them to adapt to eCommerce. Carrefour saw a significant increase in their online sales. By utilizing social media for marketing and their website, they were able to reach a broader customer base in no time. Such implementations really carved the path for eCommerce to massively contribute to almost every other business in the online space.

eCommerce Helps with Market Expansion

Imagine you’re a clothing brand looking to expand your business far and wide to different parts of the world. Just imagine your long-lost yearning for reaching a global audience has finally come true.

What’s the first thing that comes to your mind?

You want to break down geographical barriers—you want to sell products in a way that appeals to your specific customers. To dramatically increase the customer base, what you need is a campaign that attracts the individuals who are living in that particular region. If you’re marketing in South Africa, for instance, you can use vibrant patterns in traditional attire, which will particularly attract the Xhosa people. The traditional dresses are often worn by the locals to represent their personal identity, social status, and marital status. Similarly, the fabric “Shweshwe” is also traditionally worn by South African people and is quite popular because of its distinctive geometric patterns. If you’re aiming to expand your business within the South African region, you can simply introduce these attires in your eCommerce marketplace.

Using localized marketing strategies—many eCommerce entities often invest in localized marketing strategies to make their brand appear in front of the local audience. While one thing may be appealing for a particular region, it might not be all that appealing for another. Digital marketing specialists can understand user habits, identify their preferences, and learn about the economic conditions of the specific geographic location to better reach the audience. A great way is to adapt local market product names, descriptions, write blogs to market your stuff, and design checkout pages that appeal to the cultural nuances of that specific region. Implementing local SEO practices and local PPC advertising are a few ways businesses can expand into new markets.

eCommerce is Cost-Effective

Establishing a physical presence in a new market can cut down on infrastructure costs marginally. Think about it: setting up a brick-and-mortar store can take a good chunk of your investment. It brings a multitude of overhead costs, such as the cost of leasing or buying property, hiring local staff, and setting up logistics. With eCommerce, you can remove such costs, making it easy for businesses to test new markets.

In 2020, J.C. Penney, the iconic American department store chain, faced significant challenges due to declining foot traffic and the impact of the COVID-19 pandemic. In a strategic pivot, the company decided to reduce its brick-and-mortar presence and heavily invest in eCommerce practices. As a result, J.C. Penney saw an increase in online shopping sales, improved user experience, and the implementation of targeted digital marketing campaigns. This investment helped J.C. Penney expand its operations into newer markets and reach a broader customer base, leading to increased online sales.

eCommerce is Available Around-the-Clock 

A brick-and-mortar store only operates within a specific time. Whereas, an online store works around the clock. Whether you’re looking to make a purchase in the middle of the night or the early hours of your day, now, you don’t have to wait for the doors to open. Just place the order and you will receive delivery within the prescribed time limit. From the societal standpoint, you won’t have to spend your fuel and drive all the way to your desired destination of a brick-and-mortar to make a purchase. 

A prominent example where markets have gained significant advantage from around-the-clock service is none other but Amazon. It allows businesses to shop from anywhere, at any time, may it be day or night. In fact, 24/7 availability of the Amazon market has significantly contributed to sales growth, particularly during events such as Prime Day and Black Friday. Amazon’s 24/7 customer service provides maximum support for inquiries, order tracking, advancing customer satisfaction and problem resolution. 

In fact, Amazon realized that being continuously available to customers led to a habit of impulse buying. Customers were able to browse products during odd hours and make unplanned purchases. 

eCommerce Offers Personalized Shopping Experiences 

Personalization in eCommerce refers to the practice of establishing personal interactions and setting the best experiences for customers online. Personalization is based upon customer’s past purchases, browsing behaviors, geographic location, language and other personal information. By utilizing these stats, businesses can personalize eCommerce experiences for customers which are tailored to meet their specific preferences, behaviors and requirements. 

For example, a renowned shoe company helped collect data based on previous customer interactions. They studied things like browsing history, purchase history, and time required to market specific products. With the help of analytics tools, they helped businesses to find trends and patterns in customer’s purchases which helped reach targeted audiences and make relevant product recommendations. The data which they analyzed shaped the shopping experience for customers. 

As a result, customers received tailored marketing messages, targeted promotions and in return, the shoe company achieved customer engagement & brand loyalty. 

Sephora, one of the leading global beauty retail brands have successfully introduced personalization as a part of their eCommerce strategy. Sephora focuses on increasing customer shopping experience by offering individual customers tailored product offerings. So let’s say you’re a customer of Sephora and you decide to log into Sephora account, you will be greeted with a recommendation based on your previous purchases. This tailored approach assists shoppers find new products which align with beauty requirements. Another value addition from Sephora is its Beauty Insider program which offers personalized perks based on customer habits. If you’re a member at Sephora, they offer you a chance to receive tailored promotions, birthday gifts and exclusive access to new products. 

When you personalize beauty experiences, it develops a sense of loyalty among customers and ensures they are valued and understood. 

The Downside – eCommerce’s Impact on Society & Business

1. Unable to Personally Examine the Products

Online shopping lacks hands-on experience. Customers can’t touch, feel, or try products, which often leads to dissatisfaction when items arrive that don’t match expectations in quality, size, or appearance.

2. Privacy and Security in Online Purchases

Cyber threats remain a top concern. Shoppers worry about personal data—credit card details, addresses—being compromised. Despite stronger security measures, data breaches still happen, making many hesitant to share sensitive information online.

3. Fraud with Credit Cards

Credit card fraud is a risk in online shopping. Scammers can steal card details through phishing, malware, or insecure websites, leading to financial loss. Even with fraud protection, the hassle of recovery makes many shoppers cautious.

4. Delays in Receiving Products

Shipping delays are common due to weather, errors, or peak seasons. Waiting longer than expected for a purchase can be frustrating, especially when customers rely on timely delivery.

5. Inability to Identify Fraud

Online shoppers can’t easily identify fraudulent websites. Scammers often mimic legitimate businesses, making it hard to tell the difference. This can lead to financial losses or receiving counterfeit goods.

6. Guarantee/Warranty Issues

Warranty policies vary online, and not all retailers offer the same level of protection. This inconsistency can lead to confusion and frustration if products don’t meet expectations or require repairs.

7. Quality Concerns

The biggest worry with online shopping is product quality. Without seeing or testing items, customers can end up with products that fall short of advertised standards. This often leads to returns and dissatisfaction, especially with high-value purchases.

8. Hidden Costs

Online shoppers may be hit with unexpected costs at checkout, like extra shipping fees, taxes, or handling charges. These hidden costs can quickly turn a good deal into an expensive one.

9. Lack of Personal Interaction

There’s no face-to-face interaction online, making it harder to get personalized advice or answers. The absence of real-time help can leave shoppers feeling uncertain or unsupported.

10. Website Fraud

Fake websites posing as legitimate stores are a growing problem. These fraudulent sites trick shoppers into paying for products that never arrive or are of poor quality, leading to a loss of trust.

11. Issues with Unresponsive Websites or Slow Connections

Technical issues like slow-loading pages or unresponsive websites create a frustrating shopping experience. These delays often cause shoppers to abandon their carts, resulting in lost sales for retailers.

12. Complexity with Understanding Return Policies

Return policies can be confusing or hidden in the fine print. Many shoppers are unsure of their rights, and complicated returns often deter purchases. High return costs can also make customers think twice before buying.

Concluding Thoughts 

eCommerce has dramatically changed over the years, especially how we conduct our businesses. It has become not only convenient but also accessible and has helped companies to tremendously achieve their business goals. May it be a global audience, cost savings, or being available 24/7 – eCommerce assists businesses to overcome and meet those challenges in the most accurate manner. It also helps with overcoming security risks and limiting personal interactions. Today, both consumers and businesses are searching to understand the pros and cons of eCommerce especially when they navigate the online space.

The following article has decently listed the advantages and drawbacks of eCommerce on society & business and we hope it may have helped you understand them. 

Branex is an eCommerce website development company where we build eCommerce solutions for a wide range of customers and for different niche markets. Whether you’re looking for eCommerce store design, eCommerce store functionality optimization or increasing your eCommerce customer inflow, we are your one stop shop solution for building the perfect online store digital presence.