UAE and UK E-Commerce Frameworks Comparison

Subject: E-Commerce
Pages: 9
Words: 2884
Reading time:
10 min
Study level: Undergraduate

Background

The past couple of years have witnessed dramatic changes in the business world brought about by the technological advancements of the 21st century. Presently, business executives and clients are equally overwhelmed by futuristic scenarios of business assisted by a click of the computer mouse (Kalakota & Whinston, 1997). A once ambiguous notion found only in mythical and science fiction, e-commerce has not only asserted its influence in the global business scene but has also become one of the most sought-after tools of engaging in contemporary business. Businesses the world over have experienced the excitement of this new phenomenon as it maneuvered its way through the various phases of growth to reach its present stage. In some countries, the sprint to experience e-commerce during the formative years of its growth was equated to a gold rush, with businesses investing profoundly in everything starting with an ‘E’ in the hope of reaping maximum profits from the opportunities presented by the technology (Korper & Ellis, 2001).

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The fact that businesses have benefited from embracing the e-commerce platform can never be denied. It can be argued without fear of contradiction that businesses continue to reap maximum benefits in both business-to-consumer (B2C) and business-to-business (B2B) market segments (Korper & Ellis, 2001). The e-commerce framework has allowed organizations to not only transact business without having to worry about time or distance barriers but also expand their clientele without having to spend huge amounts of money in advertisement costs (Burkey et al, 2007). Apart from offering a wide allay of benefits to companies, e-commerce must have provisions that cater for the needs, values, and perceptions of customers (Andam, 2003). Indeed, according to the author, e-commerce frameworks must never be overly interested in pursuing and fulfilling the interests of organizations at the expense of customers.

This study aims to focus on two countries – UK and UAE – in an attempt to evaluate how e-commerce frameworks guarantee customer satisfaction. The Office for National Statistics (ONS) reveals that more UK-based organizations and customers are adopting the use of technology to transact business. According to ONS (2009), “…the proportion of [UK] businesses using the internet to sell rose from 14.4 percent in 2007 to 15.2 percent in 2008. The proportion using a website for their sales was 12.6 percent in 2008” (p. 1). The situation is not any different in the United Arab Emirates (UAE). Indeed, Dubai is one of the few Arab nations to fully embrace e-commerce as the preferred platform for transacting business (Dutta & Coury, n.d.)

Problem Discussion

Many seminal studies have been conducted about the viability and usefulness of businesses that integrate e-commerce frameworks into their systems. Indeed, we now know about the many benefits and opportunities that this revolutionary component of technology has brought into the business world (Burkey et al, 2007). According to Andam (2003), “…e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development” (p. 5). Business relationships have been completely transformed, courtesy of e-commerce, and the benefits of incorporating the concept are hard to comprehensively exhaust from the organization’s perspective. But while many systematic studies have been conducted over the years to show how businesses continue to benefit from e-commerce, few if any have focused on how the e-commerce applications influence customer satisfaction and loyalty. Information is lacking on customers’ experiences in e-commerce vis-à-vis other traditional methods of purchasing products and services. It is this gap that this study will seek to fill.

Study objectives

This particular study will focus on how e-commerce applications could be designed to enhance customer satisfaction and loyalty. The study aims to achieve this objective by comparing e-commerce platforms and frameworks used in UK and UAE, and how well they are able to respond to the needs and requirements of customers. The following will be the specific objectives:

  1. To critically evaluate the strategies put in place by companies in both countries to ensure customer experience while transacting business using e-commerce protocols
  2. To critically evaluate the main challenges that companies face in attempting to balance the intricate relationship between maximizing technology use to achieve more profits and enhancing the customer experience in e-commerce transactions.

Significance of Study

The value of this study cannot be underestimated. It is within our realms of understanding that e-commerce has necessitated companies to transact business in an environment that is neither limited by physical boundaries nor geographical distance (Korper & Ellis, 2001). Critics of this platform, however, have expressed concern that the platform serves to diminish customer satisfaction and loyalty by taking away the physical contact that most managers have traditionally relied on to establish long-term relationships with customers. This study aims to come up with a body of knowledge on how companies are re-designing their e-commerce platforms to secure their clients and customers from stiff competition. This information will critically assist start-up businesses as well as established companies to maximize their potential while ensuring their customers are always satisfied with the e-commerce services offered. It is imperative to fill the information gap that exists between e-commerce platforms and customer satisfaction since, according to Hill & Alexander (2000), no business can survive without customers regardless of the type and level of technology used.

Literature Review

Introduction

This particular study will attempt to evaluate how e-commerce applications should be designed to enhance customer satisfaction and loyalty. Technology is one of the key engines for growth not only in the field of business but also in every single sphere of life (Andam, 2003). From the late 20th century, technology has been at the forefront in deciding how individuals, societies, organizations, and countries relate to each other. In the business field for instance, technology has enabled organizations to undertake complex transactions with other organizations and customers using platforms that were only grasped in the subconscious a couple of years ago (Andam, 2003). E-commerce and e-business has completely revolutionized the business world. But as businesses celebrate, customers too must be kept on the same page if the desired effect of such technological advancements is to be achieved.

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Definition and Importance of E-Commerce

E-Commerce can be defined and interpreted in different ways depending on the field of study. For purposes of this particular study, the concept will be defined as “…the application of technology toward the automation of business transactions and workflows” (Kalakota & Winston, 1997 p. 3). The multi-functionality nature of e-commerce in the field of business has been phenomenal, to say the least. Schuknecht & Esteve (1999) asserts that the clearest signal yet of the exceptional magnitude of e-commerce and e-business in the global economy is the swiftness with which internet use has developed and spread during the last couple of years. Andam (2003) posits that the rapid growth of the internet and Web-based technologies such as electronic money transfers, online buying, online advertisement, and outsourcing, among others, has ultimately narrowed down the differences between traditional market segments and the all-encompassing global electronic marketplace. As such, it can be safely argued that e-commerce has become a fundamental component of the global economy.

According to Andam (2003), the employment of e-commerce in business has increased productivity and boosted greater customer involvement, not mentioning the fact that it has worked to reduce costs and enhance mass customization. E-commerce has enabled organizations to strategically position themselves to reap maximum benefits from emerging opportunities. Through outsourcing services, e-commerce acts as a facilitator for companies to source for essential human capital skills. Andam (2003) argues that “…e-commerce coupled with the appropriate strategy and policy approach enables small and medium scale enterprises to compete with large and capital-rich businesses” (p. 5). Apart from the benefits accruing to business establishments, e-commerce is advantageous to customers since it assists them to make informed buyer decisions, not mentioning the fact that it considerably reduces the customer’s sorting out time (May, 2000). What’s more, the customer spends less time to resolve issues arising from invoice and order inconsistencies since the transactions are done online. Finally, customers are handed enhanced opportunities for purchasing alternative products and services from diverse sources. The important functions that e-commerce has brought to the global business environment cannot be possibly exhausted.

Types of E-Commerce

There exist many types of e-commerce frameworks, including “business-to-business (B2B); business-to-consumer (B2C); business-to-government (B2G), consumer-to-consumer (C2C), and mobile commerce (m-commerce)” (Andam, 2003 p. 9). This study aims to focus on the first two types of e-commerce. B2B involves e-commerce ventures between two or more organizations, and mostly deal with establishing interactions between and among business enterprises (May, 2000). According to Andam (2003), an estimated 80 percent of all e-commerce transactions entails business to business, with analysts arguing that this particular segment will continue to grow at a much faster rate than business-to-consumer segment. Many logistics firms, application service providers, outsourcing firms, auction companies, and web-based enablers use this framework. On the other hand, B2C involves e-commerce ventures between business organizations and consumers (Andam). Music download companies and online sellers of tangible products or software sorely depend on this platform to reach customers. Amazon.com and Barnes and Noble are examples of companies engaged in B2C e-commerce include

The Uptake of E-Commerce in UK & UAE

Nearly all businesses in the UK are affected or influenced by e-commerce in terms of selling or purchasing commodities, services, and business-related content over the internet. As such, the uptake has been promising. The ONS (2009) figures reveal that “…internet sales [in 2008] represented 9.8 per cent of the value of all sales of UK non-financial sector businesses…up from 7.7 percent in 2007” (p. 1). The value of the internet sales, according to the statistics office, stood at £229.9bn in 2008, up from £163.2bn recorded the previous year. These statistics reveal more organizations and customers are adopting the use of technology to conduct business. A survey conducted by EU Eurostat Service revealed that UK lead other western countries in e-commerce, “with around 66 percent of individuals aged from 16 to 74 reporting they had bought goods on the web over the last 12 months” (Donoghue, 2009). Majority of the citizens polled argued that they have been led to use online shopping sites due to their convenience, flexibility, and choice.

The uptake of e-commerce in UAE is not very much different from what is happening in the UK. Indeed, UAE has made major strides to establish itself as a top class e-commerce hub, and is currently ranked at par with many EU states in the provision of basic online services. A recently concluded benchmark survey gave the Arab country a score of 76 percent in availability of online services, grouping it in the same league with other major players, UK included (LowTax.Net, 2010). Dubai businesses have specifically benefited from e-commerce due to the nature of businesses transacted in the Kingdom. According to Dutta & Coury, Dubai is a business and trade hub for duty-free commodities from nearly every corner of the world. The Kingdom’s electronic sale of cars, household goods, shoes, electrical appliances, and other products have tremendously challenged traditional business channels where traders were expected to travel to the country to place orders.

The big Question

Undoubtedly, e-commerce has a lot of benefits for businesses and customers as suggested by the review of related literature presented above. There exist a broad body of knowledge about the evolution, growth, and benefits of e-commerce especially from the perspective of these platforms, in this case the business establishments. However, little is known of the users of e-commerce platforms in terms of ensuring customer satisfaction, loyalty, and experience. The desire to know how customers achieve their satisfaction and manage to remain loyal to online companies with no physical contact whatsoever informed the objectives of this study.

Methodology

Research Design

This study will employ a quantitative research design for purposes of structuring the research process. According to Hopkins (2000), this type of research design will help the researcher to examine the issues at hand since the research is largely interested in evaluating the relationship between variables. Quantitative studies are either descriptive or experimental, but this particular study will employ a descriptive approach since the subjects, in this case the customers using e-commerce frameworks, will only be measured once (Sekaran, 2006).

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Primary data will be gathered by means of undertaking an online survey specifically designed to measure the customers’ perceptions, values, satisfaction, and loyalty levels towards companies engaging in e-commerce. According to Sekaran (2006), a survey is effective when the researcher is particularly interested in descriptive assessment of a particular phenomenon as it is the case in this study. Secondary data will be collected by means of undertaking a detailed review of related literature

Target Population and Sample

The target population for this study will comprise of customers using e-commerce in both countries – UAE and UK. The researcher intends to enlist the services of surveymonkey.com for purposes of coming up with the desired population. Purposive and convenience sampling approaches will be utilized for purposes of coming up with the desired sample. Purposive sampling will be used to assist in the process of selecting a sample that has prior knowledge and understanding of e-commerce ventures (Cohen et al, 2007). Afterwards, the subjects will be requested to respond to the questionnaire by virtue of being in the right location at the right time, otherwise known as convenience sampling (Sekaran, 2006).

Data Gathering Instruments

Primary data for the study will be collected by means of an online semi-structured questionnaire schedule. A questionnaire is desirable in a descriptive study basically because it is easy to administer the tool in an online setting (Cohen et al, 2007). The tool will be designed to measure the customers’ perceptions, attitudes, and values regarding e-commerce using a five-point Likert-type scale, and how these variables combine to enhance or lessen their satisfaction and loyalty levels. Apart from the ability to attain a high response rate, it is also easy to undertake a comparative analysis when using a questionnaire due to the fact that most items consist of closed-ended questions (Sekaran, 2006). The questionnaire used in this particular study will also be subjected to thorough testing to ensure that issues of data validity and reliability are appropriately dealt with. Secondary data for this study will be collected through a comprehensive review of literature, sourced from reliable sources, including textbooks and journals.

Data Assessment

The study will employ both quantitative and qualitative data assessment techniques. Quantitative assessment will involve coding the data contained in the questionnaires and entering them into a statistical package known as SPSS. Afterwards, cleaning and analysis of the data will be performed using the same package to generate frequency distributions and descriptive statistics that will be used to answer the study’s main objectives. Data will be presented in form of text, graphs, pie charts, and tables. The qualitative data generated by the open ended questions will be analyzed using a process known as qualitative content approach. This method involves cleaning, coding, and evaluating responses that were given in either verbal or written communication so as to permit them to be considered quantitatively (Sekaran, 2006).

Expected Results

I expect to see outcomes that associate customers’ e-commerce uptake with the level of satisfaction received from using such as platform. I also predict a scenario where customer loyalty will be dependent on the channels that customers are given to air their grievances to the companies in case they experience problems when using the online platforms.

Schedule

The below table reveals how all tasks for the study are scheduled

Schedule

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Resources

Time as a resource will be of great essence, and as such, it will be used sparingly to ensure that all the activities detailed above will fit in the given time-frame. No financial resources will be allocated for the study bearing in mind that data collection will be done through online protocols.

References

Andam, Z.R (2003). E-commerce and E-business. Web.

Burkey, J., College, G.B., & Delaware, W (2007). The Evolution of Electronic Commerce Education for Business. Journal of Education for Business, Vol. 35, Issue 2

Cohen, L., Manion, L., & Morrison, R.B. (2007). Research Methods in Education, 6th Ed. New York, NY: Routledge

Donoghue, A (2009). UK Leads Europe in E-Commerce while Ireland Lags on Net Usage. Web.

Dutta, S., & Coury, M.E (n.d.). ICT Challenge for the Arab World. Web.

Hill, N., & Alexander, J (2000). Handbook of Customer Satisfaction and Loyalty Measurement, 2nd Ed. Hampshire: Gower Publishing Limited

Hopkins, W.G. (2000). Quantitative Research Design. Web.

Kalakota, R., & Whinston, A.B (1997). Electronic Commerce: A Manager’s Guide. Upper Saddle River, NJ: Pearson Education Corporate Sales Division

Korper, S., & Ellis, J (2001). The E-Commerce Book: Building the E-Empire, 2nd Ed. London: Academic Press

LowTax.Net (2010). Dubai: E-Commerce. Web.

May, P (2000). The Business of E-Commerce: From Corporate Strategy to Technology. Cambridge: Cambridge University Press

Office for National Statistics (2006). Information & Communication Technology (ICT): Activity of UK Business, 2006. Web.

Office for National Statistics (2009). Statistical Bulletin: E-Commerce and Information and Communication Technology (ICT) Activity, 2008. Web.

Schuknecht, L., & Esteve, R.P (1999). A Quantitative Assessment of Electronic Commerce. Working Paper ERAD-99-01, World Trade Organization. Web.

Sekaran, U (2006). Research Methods for Business: A Skill Building Approach, 4th Ed. Wiley-India