In the modern era of globalisation, new opportunities have presented for tremendous growth and e-commerce improves domestic economic well-being through liberalisation of products. E-commerce promotes the transfer of data through the network topology. The advent of internet technology ignited new commercial practices and models on the global level and drove the momentum of globalisation. The world has increasingly become a global village and witnessed massive online shopping and economic power which enables trading partners to collaborate and compete globally. The 20th century unleashed the internet innovation which created new businesses models that transcend the national boundaries and led to mass customisation. Globalisation allowed many businesses to transform and expand the demands in the foreign market. Undoubtedly, the introduction of e-commerce realised paradigm shifts and changed the conceptual thinking to innovative ideas. The pervasive barriers of distance and time have been overcome with globalisation and e-commerce and surpassed transnational borders. The technological invasion harnessed information technology and witnessed optimisation of the economic resources which culminated in profit maximisation. The globalisation and e-commerce revolution altered the traditional fundamental of distribution patterns and streamlined the supply chain from domestic to global trading. As such, e-commerce and globalisation have spearheaded the economies of the world and broaden the foreign markets. This paper will investigate how and when the concept of e-commerce started. It will describe the background information on e-commerce. The essay will demonstrate how e-commerce and globalisation work as well as provide the relationship between the two concepts. Furthermore, the paper will delineate Taobao case study which is used in China. The section will provide an introduction to Taobao, explain how it works and analyse the relationship between Taobao and prosumer capitalism.
Background Information on E-commerce
Electronic commerce is the process of buying and selling products through the internet using online platforms. E-commerce is a safe, convenience and user experience method of shopping which has improved exponentially since its inception. The history dates back to 40 years ago particularly after the “advent of the world wide web” (WWW) (Singh, 2016). An analysis into the e-commerce timeline reveals that between 1950 and1960, IBM pioneered the online transaction processing (OLTP) system which involved a way of handling money instantly in real time (Ayo et al., 2008). In 1960 - 1982, there was the development in Electronic Data Interchange (EDI) which was a major advancement that paved the way for the growth of electronic commerce. The technological advancement was essential in facilitating online transactions and replaced the traditional faxing and mailing processes. It enabled the digital transfer of information between computers. Through EDI, traders were able to transfer invoices, orders and carry out business transactions through the internet. Data was examined using the Value-Added Network (VAN) and directed to the recipient for processing.
In 1979, an innovator, entrepreneur and an English inventor called Michael Aldrich developed the concept of online shopping. Aldrich advanced the idea of “television set to a transaction processing computer with a telephone line” and he used it to deliver groceries to supermarkets (Singh, 2016). The process saw the coining of the term teleshopping which meant shopping at a distance. From 1982 to 1990, the process of online shopping denoted to be a lucrative commercial practice. Therefore, it became widespread across many computers after the “advent of the World Wide Web by Sir Tim Berners-Lee” (Singh, 2016). The arrival of the internet in the 1990s led to the development of HTTP, URL and HTML domains that saw remarkable growth in online shopping. France in 1982 introduced the Minitel idea where subscribers used the computer network for online shopping. By 1999, more than nine million Minitel terminals were used to distribute products and connected over 25 million users. Amazon.com was among the first online platforms and sold books online. The development of online payment methods such as PayPal in 1998 also enabled the online transaction.
How E-commerce (Globalisation) Works
E-Commerce entails trading functionalities like ordering, marketing, delivery and payment through online platforms. The technology uses computer-mediated networks in ordering and processing of payment and delivery. The global phenomena work through the electronic networked systems (Antony, 2017). The e-commerce combines three different systems which are; a web server, database system, and the dispatched system (Chaffey, 2011). The web is the internet that manages the online storefront and the transaction processes. This is done through the internet links and using computers and saves the details of the customers. The database system is used to check the items that are in store and is constantly updated to enable potential buyers to place their orders. The dispatch system is linked to the warehouse and is where the goods ordered are sent to the customer through the distributional channels.
The Relationship between E-Commerce and Globalisation
Notably, e-commerce drives the face of globalisation, and the two concepts are interrelated. The idea has become the most prominent phenomena in the 20th century and has vitally shaped the world economy drastically. E-commerce involves online shopping while at the same time globalisation relates to the interconnectedness between countries (Ajayi and Aderounmu, 2010). Globalisation and e-commerce depend on the internet to facilitate marketing. Globalisation through e-commerce has resulted in the decline of administrative barriers and a sharp decrease in the cost of communication and transportation as well as the fragmentation in production processes (Aydın and Savrul, 2014). The development of IT impacted on the concepts which led to the diversification of resources and the creation of new opportunities that opened foreign markets. The processes of e-commerce led to accessibility to new markets, and the widespread sense of productivity broadened the markets. The connectivity through e-commerce and globalisation means that consumers are less restricted with the physical borders and technological changes modelled the global economy.
E-commerce transforms the marketplace and changes the ways of businesses as well as creates new channels that drive globalisation. Through e-commerce, knowledge diffuses through human interconnectivity and opens adaptability which redefines the global marketplace. E-commerce serves to accelerate the face of globalisation of economic activity like direct travel booking, e-banking, and online marketing (Ajayi and Aderounmu, 2010). Therefore, e-commerce has increased globalisation through increase interactivity economy and linkages have extended to reach the world at large. E-commerce facilitates fast production at a low cost and allows the firm to operate in global filed. The buying and selling of goods and services electronically have created interaction and integration among companies, people and governments in various countries and thus facilitated international trade (Bisht et al., 2000). Through e-commerce and globalisation, companies have been able to increase revenues and provide a competitive edge for better performance.
Case study: Taobao owned by Alibaba
A Brief Introduction to Taobao
Taobao forms the world's biggest e-commerce website platform for small businesses. People open online stores in republic of China in areas including Taiwan, Macau, Hong Kong, and Mainland. Taobao was launched in 2003 by the Alibaba Group. Since then, it has vitally become the country’s major player in the e-commerce market. The online shopping platform consists of more than 370 million registered users and over 1 billion product listings. It facilitates consumer to consumer (C2C) retail trading through the provision of small business stores. Sellers can post the products they wish to sell through auction or fixed prices. It has features such as instant messaging and independent search engines. The buyers are also able to access the background information of the seller including complaints, ratings, and comments.
How Taobao Works
The platform provides C2C shopping experience where sellers and buyers meet. After accessing the website, the buyer selects the item of choice and views the product information, the reviews, and the ratings (MarketingtoChina, 2018). The information enables the buyer to determine if the product is of quality or not. The information gives a description of the product or the service offered to the customer and the delivery process. Rating above 4.8 are considered to be of good quality, and the buyer may go ahead a buy the item. The customer places the order and later fills the delivery details. The website has two shipping options which are direct and consolidate shipping. Once the method of shipment is confirmed, the customer is prompted to select the payment method that is most convenient (MarketingtoChina, 2018). The person receives a confirmation message that the payment was successful. Delivery is done between 1 to 3 days, but the customer can track the progress through the “Taobao Global App”. If the product fails to be delivered or does not meet the expectations of the consumer, the buyer is allowed to ask for a refund which is done within 25 days.
Analysis Relationship between Taobao and Prosumer Capitalism
Prosumer capitalism is a phenomenon that has increasingly become predominant and relates to the control and exploitation of prosumers. Primarily, prosumer capitalism involves both production and consumption and does not necessarily focus on either of the two. The recent explosion in the user-generated content via the internet has facilitated the development of prosumer capitalism where people engage in online shopping (Antonio, 2015). Therefore, Taobao relates to prosumer capitalism as it involves online shopping. The capitalism mechanism has vitally fuelled series of recent social changes associated with internet websites such as Taobao. The platform uses user-generated content to make online purchases and market capitalisation. At the same time, Taobao is digital prosumer capitalism where is it controls proconsumers. The economic system is unique, and that producers are not able to exploit the sellers into buying what they do not want. Taobao platform has many products which facilitate the effectiveness and efficiency which come with prosumer capitalism (Ritzer and Jurgenson, 2010). Taobao makes the shopping experience to be comfortable and useful and eventually turn to profit making.
The rise of prosumer on the internet facilitates the development of websites such as Taobao. The merge between consumption and production has thus led to the growth of ‘prosumption’ (Sookeung, 2014) This describes the trend of the consumers being provided with the opportunity and responsibility to produce the products of choice (Antonio, 2015). Therefore, Taobao is a ‘prosumption’ platform that allows consumers to be exploited at their convenience (Ritzer and Jurgenson, 2015). The ever growing internet of things offers services that encourage the users to produce information and facilitated exchange of money (Ritzer and Jurgenson, 2015). The relationship between the two has offered the opportunity to market businesses and showcases a variety of products. The liberalisation of markets has contributed to the mutual exploitation between the buyers and the sellers. Thus, consumers take part in designing the process of products consumed and thus blends between the producers and the consumers.
Agreeably, the age of prosumerism has revolutionised the world and impacted on Taobao. Numerous users currently operate the two slides of the market as producers and consumers. This is the same case with Taobao which provides consumer to the consumer shopping experience. Prosumer capitalism is changing the economic dynamic. Furthermore, the Taobao platform is related to prosumer capitalism as it provides an innovative way of allowing the customers to interact with one another. There is no traditional market in this form of capitalism which requires the business to customer relationship. With prosumerism, the customers only purchase their products online and facilitate an environment where customers sell their goods and services (Ritzer and Jurgenson, 2015). This is done through the electronic commerce where the data is transferred electronically in order to enhance transactions as it is the case with Taobao. The website has streamlined and globalised its services to give control to the consumers in selecting the products of choice. Thus, prosumerism and Taobao are related because the customers can directly select the product at convenience.
Many users or consumers now operate the two sides of the market as consumers and producers and thus known as prosumers. Taobao along with prosumerism offers a variety of products at convenience which is competitive and affordable to the consumers. Taobao blurs the distinction between the producers and the consumers and showcases digital revolution. Technology has allowed people to connect and share business content. It relates to behavioural shifts in consumers due to the availability of information in the digital economy. Managing consumers online has been made easier and convenient. Sellers strive to keep their reputation
Conclusion
E-commerce and globalisation have enhanced marketing and productivity as well as encouraged greater customer participation and customisation. The new opportunities for business in the globalised market include access to new market abroad and profit maximisation. Access to capital, increased access to technology and greater income employment are other desirable opportunities. The history of e-commerce relates to the introduction of teleshopping and Electronic Data Interchanges (EDI) in the 1970s which paved the way to the modern e-commerce process. The mechanism of EDI enabled the transfer of data between computers without the need for human intervention. People have the ability to transact and communicate. As a result, there has been the erosion of geographic and economic boundaries. The philosophical and technical tenet in the widespread of internet platforms shifts the consumer power. The factors have changed the economic structure of nations, increase sales, reduced costs, opened markets and improved competition. Thus e-commerce reinforces globalisation and gives international competitive advantage in the international markets. Taobao is one of the most successful online shopping sites. It strongly relates to prosumer capitalism where consumers are given the control and responsibility for their shopping and blends production and consumption.
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