Journal of Electrical and Electronics Engineering

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Electronic Commerce - a Modern Form of Business

c u e Sunhilde', KANYA Hajnalka^
' University of Oradea, Romania, Faculty of Textiles and Leatherworks, B. tefnescu Delavrancea, nr 4410058, Oradea, E-Mail:sunhilde_cuc@yahoo.com ^ Universitatea Crestina Partium, Romania, Facultatea de Stiinte Economice, Str. Primariei nr. 27,410209 Oradea, E-Mail:kanyahajnalka@yahoo.com:

Abstract - In the last years, the Internet has known an impressive evolution, having a major impact on all aspects of life. This paper presents a short review of the literature on e-commerce, the main models, and the status of e-commerce existing in Romania. As conclusion we can affirm that electronic businesses, electronic commerce is developing in Romania, and Romanian organizations must face the challenges of the new economy, must search the opportunities offered by the Internet, in order to assure their success and future. The study might serve as a starting point for further research in e-commerce in Romania. Keywords: e-commerce, e-business, online marketing, Internet, Internet based technologies I. INTRODUCTION A common defmition of the electronic commerce (ecommerce) underlines that it is the management of the commercial activities using electronic equipment and the possibilities offered by these in order to increase the area of communication and information of the clients during their partnerships with different producers and intermediaries. In a wider sense electronic commerce is the electronic change of information between business partners. [1] E-commerce is considered as exchanges between implied parts (individuals, organizations) mediated through technology, supported by internal activities or between organizations through electronic means. [2] The defmition offered by the Information Society Project Office of the European Council underlines the technological aspects of the electronic commerce, as electronic commerce is deflned as any form of business transaction, during which the implied partners interact mostiy in electronic way, and not physically or directly. Electronic business (e-business) is a wider notion than the electronic commerce, it refers to how businesses are managed electronically, and using Internet based technologies. During electronic businesses the organizations interact with their clients, suppliers and intermediaries and other partners (for example banks, governmental organizations, local

authorities etc.) using the Internet based technologies, and of course internal operations are managed also electronically. [3] E-businesses represent the use of information technologies in the internal processes of the businesses, while they are implied in commercial activities. [4] E-commerce includes electronic presentation of the products and services, online acceptation of orders and payments, getting automatically information about the clients' accounts, online payments, automatically supplying of management solutions. Electronic mobile commerce is defmed, as commerce using wireless means, like mobile phones, digital personal assistants etc., which assure wireless connection to the Internet. [5] Digitalization and connectivity are those phenomena that represent the base of the electronic conmtierce. Digitalization - refers to the possibility of transforming electronically in bites pieces of text, data, sounds, image, and sending it in big quantities and rapidly from a computer to another. Connectivity - using computer networks it becomes possible the electronic data exchange, electronic commerce, electronic communication between people, partners, organizations (these networks can be: intranets, extranets, intemet).[6] Results of different researches show an increasing tendency of the amount of money spent online by Internet users, which show the development of the electronic commerce. [7] The Worid Wide Web or simply Web is the component of the Internet, which is interesting from commercial point of view. A lot of web pages appear constantiy on the Web, but of course a lot of web pages also disappear. [8] The internet offers a lot of new possibilities for individuals and organizations: several elements of a transaction can be realized in an interactive way, there are no constraints of time and space, using multimedia tools voices, images and text can be sent, relatively at lower costs (which are continuously decreasing). Due to these advantages the Internet is a polyvalent and useful tool for e-commerce in comparison with other tools. These tools can be combined in different ways between them or with other traditional tools (like postal services, traditional selling

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in shops) in order to increase the effectiveness and efficiency of the electronic commerce. Thus the Internet reduces much more the barriers in communication and commerce in comparison with other tools of the electronic commerce or traditional commerce. The e-commerce has an important impact on the economy as it transforms the traditional market and way of doing businesses, reduces the distance between the seller and buyer, facilitates the rapid dissemination of the changes in economy, increases economic interactivity, reduces the importance of the time, facilitates globalization. [9] Electronic Commerce Models In e-commerce there exist different kinds of transactions: B2B (Business to Business - transactions between organizations), B2C (Business to Consumer transactions between selling organizations and their consumers), B2A (Business to Administration transactions between organizations and public administration organizations), C2C (Consumer to Consumer - transactions between individuals), A2C (Administration to Consumer - relations between public administration organizations and citizens), etc.[10] B2B represents the most widespread electronic commerce and electronic transactions between organizations included, called IOS type (Interorganizational Information Systems). There is several types of inter organization systems: electronic data interchange (EDI - Electronic Data Interchange) value added networks (VAN - Value Added Network), electronic funds transfer (EFT), Extranet sites securely connected to the Internet, EDI combines integrated messaging, email and electronic forms, databases shared extranet sites, supply chain management (supply chain management). Products most suitable for B2B trade in order 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 selling retail 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 of the financial transactions on the Internet: stock-market transactions, banking operations, insurance policies. [6] There exist different tendencies all over the world in order to develop e-commerce, and according to this tendency different countries adopt specific measures to create and develop the information society of the country, because the state of the development of the information society infiuences the development of the ecommerce. It seems that the United States of America, and other states of North America present advantages in this field. The European Commission launched the "e-Europe Plan" [12] in 2000 in order to develop the information

society in the European Union, and continuously revised and renewed this plan, establishing different priorities regarding this problem, for example increasing the investments in information and cotnmunication technologies, eliminating the digital gap between Europe and USA regarding the access of organizations and people to the online operations, etc. It was considered a success of this plan that at the end of 2002 in the European Union 50% of the inhabitants used the Internet regularly, and 90% of the schools and organizations had non-stop Internet connection. The necessity of developing such a plan was evident because there appeared regional differences in information infrastructures of the different countries of the European Union. In order to solve these problems the European Union invested 10 billion Euros in order to develop the information infrastructure and technologies, and of course to develop the e-commerce. Through the following "e-Europe 2005" Action Plan it was considered as important aspects the foUowings: to continue the development of online access to the public services for the people and organizations, to diminish the regional discrepancies between different groups of internet users, to encourage and support the use of 3G technologies, to promote the use of information technologies and electronic commerce by small and medium sized companies etc. [13] After finishing the implementation of this Action Plan it was developed the "2010 Initiative" to facilitate the improvement of economy, society and personal quality of life using information and communication technologies.[14] The "Europe 2020 Strategy" was launched by the European Commission to offer guides for facing the challenges of the economic crisis and to prepare the economy of the European Union for the next future, and this emphasizes the necessity of "smart growth", "sustainable growth" and "inclusive growth", including the components linked to the development of information society and electronic commerce in the countries of the European Union.[15] n. ELECTRONIC COMMERCE IN ROMANIA Romania is part of the European Union, as a result considers important the development of the information society. In Romania it was developed the Infosoc Programme in order to stimulate and support the development of the Information Society in Romania. This programme was correlated to The National Strategy of Economic Development of Romania, to Th National Strategy of Informatization. The e-commerce is developing in Romania, too, but according to a study published in the European Commission, the Information Society in Romania is still in its early stages, but it is showing an accelerated trend of development and modernization. [16] Romanian companies and companies from other countries offer their products and services to Romanian Internet users. In the past ten years the percentage of Internet users in Romania has increased 10 times.

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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 Romania by going online every day or almost every day, compared with 53% average for the EU [19].
Tabell. Internet Usage in Romania comparative with the

WORLD Population REGION ( 2009 Est.)

Internet Pop. Users. of World% Latest Data

User Users Growth of (2000- World 'opulation) 2009) % 'enetiation

( %

EU Romania Rest of World

489,601,562 22,215.421

7.2

319,393,400 7,430.000

65.3 33.4

238.9 828.8

17.7

6.278.203.646

92.8 1.482.435.111

23.6

456.1

82.3

rOTAL 6.767,805.208 WORLD

100.0 1.802.30.457

26.6

399.3 100.0

Source: httD://www.mtemetworldstats.com/stats9.htmtteu

Regarding the use of the internet and e-commerce services in Romania there exist some specific characteristics: 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 exist a lack of trust in internet services, in electronic commerce services and especially in electronic payment services, the grade of credit/debit card uses is low, the legal frame does not facilitate properly the development of 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 online transaction. The lack of knowledge in the use of computers, Internet and e-commerce can be also major problems hindering the use of IT from the Romanian consumers. Studies also have found that knowledge and skills gained 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 Romania there 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 Internet access services in Romania for individuals and organizations. Some of them offer other services related to the use of Internet, too. There exist companies that offer software products for electronic businesses, for electronic commerce. In Romania the B2C (Business to Consumer) sector of the electronic commerce is more

developed 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 the whole spectrum of the relationship and networks within government regarding the usage and application of ICTs whereas e-government is limited to the development of online services). It is an institutional approach to jurisdictional political operations where as e-govemance is a procedural approach to co-operative administrative relations, i.e. the encompassing of basic and standard procedtires within the confines of public administration [22] .Regarding the online presence of the authorities, they are invisible for more than four-fifths of internet users in Romania. Thus, less than 20% shall inform the authorities' official sites, far below EU average, which exceeds 50% [23]. To streamline the tax system and ease access from this specific information Romania will be developing a dedicated system impact of business and government institutions will be based on the concept "Access only through a single point" to digital information of interest in Romania e-Romania web portal[24]. In Romania generally are used virtual shops in order to present the companies' offers related their products and services (where internet surfers can place orders online, filling an online form), but of course we can find different other business models, too. A study commissioned by ANC and realized by RomCard to evaluate e-commerce market in Romania in 2008 shows that the number of online stores in Romania will continue to increase by 50% annually in the 2009-2011 period, reaching up to 3,000 stores that will carry functional activities of commerce via Internet The ecommerce has an ascending growth rate, ending the first half of 2009 with 570,000 transactions and a total volume of 43.5 million euro, up 68% from the same period last year, according to RomCard [25]. Half of online stores are located in Bucharest, Romania (49%), and some counties have decided to compete in electronic commerce: Cluj (5%), Brasov (4%), Tins (3%), U.S. (2.5% ), Bihor (2%) [26]. Romania ranks fifth in the Central Eastern European region in terms of Internet users, but ranks second to last based on the value of the online advertising market per user, according to a recent study issued by IAB Europe and Geniius Research. The Romanian online advertising market reached EUR 15.3 million in 2009 with 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 online advertising market was of EUR 4.3 million in 2009 and the amount spent per user was of EUR 1.4. The highest online advertising spending per user was recorded in the Czech Republic, of EUR 48. There, the online advertising 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.

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The use of debit/credit cards is not very common in payments, neither in online nor in offline payments. m . CONCLUSIONS The main challenges for the Romanian organizations can be summarized as follows: the changes generated by governmental reforms, European Union membership, changes of legal environment, reduced financial resources, needed improvements in management knowhow, intensification of competition, global economic crisis etc. As conclusion we can affirm that electronic businesses, electronic commerce is developing in Romania, and Romanian organizations must face the challenges of the new economy, must search the opportunities offered by the Internet, in order to assure their success and future. Regarding the Romanian e-commerce, the trend is an upward one. The number of online shops increases significantly from year to year like the number of consumers who shop online, the security standards are aligned with international ones; there are also various online payment methods and the quality of products is generally high. The electronic commerce development depends on the evolution and overall quality of telecommunication networks and the equipments that are connecting to it. In many countries the state of telecommunication systems cannot yet develop advanced digital networks. REFERENCES [1] Oprean, Victoria - Oprean, Dumitru: Mcanisme ale comertului electronic (con^inut ci arhitecturi). TRIBUNA ECONMICA. Nr. 12/2003, p. 42. [2] Rayport and Jaworski cited by Gay, Richard Charlesworth, Alan - Esen, Rita: M@rketing online - o abordare orientat spre client. Editura All, Bucureti, 2009, p. 5. [3] Eszes Istvn - Bnyai Edit: Online M@rketing. Mszaki Knyvkiado, Budapest, 2002, p. 105. [4] Philips cited by Gay, Richard - Charlesworth, Alan - Esen, Rita: M@rketing on-line o abordare orientat spre client. Editura All, Bucureti, 2009, p. 5. [5] Gay, Richard - Charlesworth, Alan - Esen, Rita: M@rketing on-line - o abordare orientat spre client. Editura All, Bucureti, 2009, p. 6-7. [6] Kotier, Philip: Managementul Marketingului, Editura Teora, Bucureti, 2002, p. 975. [7] For example in www.emarketer.com cited by www.e-kereskedelem.hu/news.php?id=3531 [07.10.2003] [8] Janal, Daniel S.: Online Marketing Kzikonyv. Bagolyvr Knyvkiado, 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 orientat spre client. Editura All, Bucureti, 2009, p. 40. [ll]Nistor C , Nistor R., Muntean M. C , 2010 ECommerce- Winners' Choice, the Proceedings of the 10th WSEAS International Conference on APPLIED COMPUTER SCIENCE (ACS '10), Iwate Prefectural University, Japan, October 4-6, ISSN 1792-4863, ISBN 978-960-474-2318,Published by WSEAS Press www.wseas.org [12]Grecu, Andreea: Planul e-Europa 2002, un succs de proportii. TRIBUNA ECONMICA, Nr.2/2003, p.7O. r 131 http://europa.eu/legislation summaries/information societv/124226 en.htm [06.03.2011.] [14] http://ec.europa.eu/information societv/eeurope/i20 10/archive/eeurope/index en.htm [03.04.2011.] 151 http://europa.eu/rapid/pressReleasesAction.do7refer ence^IP/10/225&fonnat=HTML&aged-0&languag e^EN&guiLanguage=en [05.04.2011.] [16] Europe's Digital Competitiveness Report, Volume 2: 2010 ICT Country Profiles, Bruxelles,04.08.2009http://ec.europa.eu/informatio n_society/eeurope/i2010/docs/ annual_report/2009/sec_2009_l 104.pdf [28.03.2011]. [17] http://intemetworldstats.com/eu/ro.htm [ 28.03.2011]. r 18] http://www.Intemetworldstats.com/stats9.htm [ 28.03.2011]. [19]http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPU B/KS-QA-1O-O5O/EN/KS-QA-1O-O5O-EN.PDF [20] Awad, N. F., and Ragowsky,2008, A. Establishing trust in electronic commerce through online word of mouth: An examination across genders. Journal of Management Information Systems, 24, 4 (Spring 2008), 101-121 [21] www.crie.ro/nouaeconomie/srl53-situatiaroVD.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 roman ii-si-internetul-2011 analiza.pdf [28.03.20111. [24] Sipica Alexandru , 2009 , The Impact of Ecommerce on SMF's , Scientific Papers Series ,>lanagement. Economic Engineering in Agriculture and Rural Development" [25] (http://www.izzisale.ro/Studiu-eCommerceANC.pdf). [28.03.2011] r261 http://www.underclick.ro/articol-4989-snec-2010studiu-comert-electronic-romania-2010.html. [28.03.2011]. [27] Romanian online advertising spending per Internet user, among lowest in the region,March, 2011, http://www.romania-insider.com/romanian-onlineadvertising-spending-per-internet-user-amonglowest-in-the-region/2129 l/r08.04.2011 ]

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