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Comparison of Trade and Traditional Trade under Electronic Commerce

Source: Shangpin China | Type: website encyclopedia | Time: 2015-12-08
E-commerce Website Design With the development of the network economy, it has emerged, and then affected the development of international economy and commerce, and led to the innovation of trade methods, marketing, management and policies. These innovations will further intensify trade competition and promote trade development. Network marketing has become one of the most effective marketing methods in the new economic situation. Trade under e-commerce is an important part of e-commerce. It is a form of trade in which economic groups and individuals complete the production, improvement, ordering, sales, distribution and payment of goods between specific and unspecified trading partners through the network. This trade mode has brought great changes to traditional trade.
 
Trade under e-commerce
 
The production of enterprises is the premise of trade, and the production of enterprises is often carried out in a relatively fixed location. For some enterprises that want to carry out international trade, tariffs have greatly increased the cost of exporting their products, and regional differences are not conducive to the collection of market information and product after-sales information. Under the traditional trade mode, enterprises can only solve these problems by setting up production and sales branches abroad or entrusting foreign agents. E-commerce breaks this restriction. All information of e-commerce is concentrated on the Internet. Enterprises can release information through the Internet, and customers can counter the information to enterprises through the Internet. E-commerce breaks the time-space boundary between enterprises and consumers.

When conducting trade activities among enterprises, it is inevitable to have some contacts and negotiations. In the traditional way of trade, these contacts and governance talks are bound to take place in some places, which not only delays time, but also increases costs. Under e-commerce, all trade activities can be carried out online, such as online negotiation, online ordering, online distribution, online sales and online payment. The transfer of goods and services from fixed places to online has undoubtedly improved efficiency and reduced costs. The process of business activities requires a variety of documents, such as documents, agreements, statements, etc., which will consume a lot of paper, and their transmission will also consume a lot of time and cost. Under e-commerce, these documents can exist in the form of electronic data. The transmission of documents can be realized through electronic data exchange, and the agreement can be finally signed on the Internet. This method is called paperless, and paperless trade can greatly reduce the links of traditional trade and save money. The following table shows that businesses that need 20 links in traditional trade can be completed in only 8 links in e-commerce.

You can also enjoy tax exemption and other favorable conditions for online trade. In 1999, in order to develop e-commerce business, the World Trade Organization passed a resolution stipulating that no country shall levy tariffs on trade conducted through the Internet within one year. The United States government has requested that no taxes be levied when conducting e-commerce trade between domestic states. This undoubtedly further reduces the cost of trade.

These advantages of reducing costs and improving efficiency undoubtedly provide convenient conditions for SMEs to enter the international market. Under the traditional mode of international trade, compared with powerful large enterprises, SMEs are restricted by capital, human resources and other resource conditions, so it is more difficult to open up the international market. In e-commerce, the negative impact of the lack of capital, human resources and other resources can be minimized, allowing SMEs to enter the international market. At the same time, the new way of international trade under e-commerce has also created a new type of enterprise, that is, electronic virtual enterprise. This kind of enterprise does not have physical entities, but it centralizes the purchase or sales authority of a group of independent small and medium-sized enterprises and provides more products or services than any other enterprise.
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