Welcome to BASE21

Writer: Cha Eu-gene
Source: The Chungang Herald

People can probably say that the greatest event that set history on a new track is not the Industrial Revolution or the invention of nuclear power, but the invention of letters and printing. The significance was the ability to share information which had previously been only a tiny portion of a person's possessions. Sharing information brought about the change in the organization of society and accelerated the development of civilization as well. However, the existing art of printing has obvious limits that cannot go beyond time and space. Today, the internet suggests a new concept for sharing knowledge and information that transcends time and space.

EC (Electronic Commerce) refers to every business conducted through computer communication - usually the Internet. Therefore it is also called as Internet Commerce. The business market base is on the Internet and the two parties, buyer and seller communicate on such a basis. To make IC or EC successful, the flow of three elements between the two parties must be sucsessful. These three elements are information, material, and money. The information which is needed to sell and buy should be exchanged mutually. The material should be sent from seller to buyer, and money flows from buyer to seller for the price of the product/service. The success of EC is guaranteed only when these three conditions are performed swiftly, safely, and effectively. EC can be understood in the point of view of buyer and seller largely.

It was late 1998 when the term EC was generally introduced in Korea. Starting with Interpark and Lotte Internet Department Store in June '1996, EC has had much more significance than just a general way of commerce on the internet. Early EC started from 'Business to Customer' and has an electronic catalogue form. It is currently developing to various forms such as 'Business to Business' and 'Business to Government'. It is used as an effective way to embody connecting marketing that maximizes the connection between a customer and business.

EC networks all the procedures of distribution. Consequently, this service is possible 24 hours a day, any day with no human help. This reduces expenses. Moreover, database system such as Profile Data, Navigation Data, Order Data have formed the basis for e-trade marketing.

However, there still exist some stumbling blocks in approaching EC. According to OECD reports last year, following four conditions should be resolved. First of all, convenience in approaching the internet, the high speed of network and pervasiveness are needed. Secondly, it is pointed out that consumers cannot fully trust the EC system. Third, legal and institutional uncertainty which is brought about by the new electronic trade environment must be cleared up. Fourth, problems concerning payment and shipment must be solved. It is also suggested that existing distribution structures ought to be changed and high prices estimated to establish and to keep the internet markets up-to-date. Nevertheless, rapid progress of EC is expected since internet markets could be embodied by lower costs.

The biggest merit of EC is that it transcends time and place dealing with an international market. At the same time, however demerits exist. The solutions to these problems are needed. First, we need to overcome credit problems which occur because the persons concerned cannot see each other to make and finalize a deal. As the EC market is growing dramatically, EC concerned crimes are also increasing. Consequently, electronic signatures to verify who is the seller or buyer and other forms of certification to secure information exchange are spreading world-widely. In regards to the international electronic certification service market, it is estimated that it makes up about 2-3% of the whole IT (Information Technology) market. Another problem includes delayed delivery. Recent research shows that American consumers put much importance on punctuality of delivery. Online payment by credit card is popular these days, but electronic cash or checks need to be readily available if EC is to be fluid. Finally the web market is invisible, which is what so greatly distinguishes it from general markets. Therefore, marketing ads by mutual cooperation, online search engine and portal sites are becoming increasingly popular and necessary. It is known that marketing is effective when it is parallel with to the conventional marketing methods of newspapers or TV and radio.

Compared with the existing trade market, EC is different in its way of assuring credit. In general trades, some standard of credit can be ensured between a buyer and a seller. A seller believes that consumers are potential buyers and able to pay for the offered products. Likewise, consumers believe that tradesmen will offer wanted products and hand over them. When the first trade is done, there can be many ways to identify each other.

On the other hand, it is very hard to assure some credit between the two subjects on EC. There is no opportunity to judge because it is relatively difficult to connect the person online with the real one. Electronic sellers are unable to trust all potential buyers, and in a sense, no one at all. The opposite is true for consumers. This is partially due to the uncertainty as to how long a web site will last. It is very easy to make a fake web page that imitates a part of a large-scaled company. Consequently, there need to be some tools to assure credit and trust between a buyer and a seller.

There are also big differences in the dealing and selling of products. In general markets, it is common to decide what to buy and the price on the spot. EC is unable to provide a written warranty or guarantee for the quality of the product. Most customers see the failure to provide this as a danger of potential frauds.

EC contains all sorts of economic service like to advertise or purchase products and services. Usually, it refers to a narrow meaning that buyer and seller make a deal through internet. But because EC truly goes beyond the limits of time and space in cyberspace, it will bring about a revolutionary change in the current economic system which focuses on real objects. The term 'shopping mall' refers to a multi-shopping area in which people can interact. This is now being made available even on the Internet.

Even some very conservative large enterprises are jumping into EC market. In foreign countries, there are some enterprises that are making great profits despite the fact that EC is in its initial stages of forming basic markets. The representative case of EC is advertisement. It is a popular, very large-scaled market.

Currently, most demo programs or public domain software distribution is done through networks. What takes up a major part of such networking is entertainment including games, music, movies, and even gambling. There are no more barriers to materialize these things on networks. If it is large enough to be transmitted freely by the Internet, this section has great potential power. It is anticipated that many additional commercial activities are to join the network.

Network shopping has some regional restrictions since the goods need to be delivered to consumers. Therefore, building up an international delivery system is one of the most important factors for EC. What is being currently utilized most is online publishing, database services, and software distribution.

The emergence of WWW(World Wide Web) opened the door to online publishing. Concerning the database services, it usually generates very little money. When a kind of micropayment mechanism is developed, explosive market enlargement is expected. Since software currency can easily be adapted to network, software circulation will someday be very popular.

Electronic Commerce has spread worldwide since 1995. Owing to the racteristics of the Internet, anytime, anyplace on the earth products can be bought and old. Since the EC market is not just a simple added convenience of the Internet, it is important this be recognized as a new custom in commerce and its emerging uses be developed.