Introduction
According to Purcell and Toland (2004), Internet and Communication Technology offer the opportunity to reduce the barriers of distance, and give countries better access to the global economy. This is where e-commerce comes into picture which covers an electronics trading of goods and services, electronic fund transfer, online procurement, direct marketing, electronic billing through the internet. It is very important for businesses to embrace the latest technology to conduct their business, whereby switching the traditional business into a better concept in terms of efficiency,productivity, profitability and competitiveness. (Scribd Inc. 2012)
In this assignment, we use Air Asia as an example of an e-commerce company where that company was voted as the most popular website for online shopping that makes it the number one e-commerce company in Malaysia.
AirAsia Berhad is a Malaysian-based low-cost airline where it was the largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at the Kuala Lumpur International Airport (KLIA). Air Asia is using e-commerce to promote and sales ticket through online. Passengers can make booking directly and buy tickets through online and just use a booking number to check in. The website also available in seven different languages, including four on its Malaysian site and registered members also receive promotions online though e-mails.
Definition of E-commerce
Electronic commerce or e-commerce is a term for any type of business, or marketable transaction, that involves the transfer of information through the Internet. It covers a range of different types of businesses, from consumer based retail sites, through sale or promotion, to business exchanges trading goods and services between corporations.
According to Network Solutions, LLC (2012), e-commerce allows consumers to electronically exchange goods and services with no obstacles of time or distance. Electronic commerce has expanded quickly over the past five years and is forecast to continue at this rate, or even accelerate. In the near future the boundaries between "conventional" and "electronic" commerce will increasingly indistinct as many of the businesses move their operations to the Internet. E-commerce can be divided into e-tailing or "virtual storefronts" on Web sites with online catalogs or virtual mall, the gathering and use of demographic data through Web contacts, Electronic Data Interchange (EDI), the B2B exchange of data, e-mail and fax as media for reaching prospects and established customers, B2B buying and selling, and the security of business transactions.
Disadvantages of e-commerce relate to Air Asia
Privacy and security
When the customer makes an online purchase, there need to provide personal information such as an address, telephone number and banking or credit card account information to purchase. Unfortunately, some of e-commerce websites are not able to harvest other information about the customer online behavior and preferences. This could lead to credit card fraud, or worse, identity theft. Moreover, it causes many people feel making an online purchase does not compromise their personal information, there still prefer not to take a possibility of having their account information accessed by a third party, and will only make their purchases at a store rather than online purchase.
For example, in Air Asia, security continues to be a problem where the privacy policy is not a contract and does not create any legal rights that make some of the customer doesn't feel confident about the integrity of their personal information and the payment process from online. Air Asia is well known with the cheap, no-frills flight service with the brilliant slogan ‘now everybody can fly’. However, some of the Air Asia customers complain that Air Asia has violated the law of privacy by sharing personal information to third parties where has complaint pertaining that about some of user personal information such as I.C. no. and full name was obtained by anonymous company. (KambingBujang.com, 2008)
Payment services
E-commerce is often performed using bank account, PayPal and credit card facilities as a payment method for every transaction that be performed in online. According to Tyler Lacoma (1999), online payment systems are new and global in their perception, problems can occur when it comes to applying them to all e-commerce company. Some types of payment that user used to pay may not be available in other countries, even when purchasing online from those countries is an option. The e-commerce company can also struggle to match up the values of different currencies or different types of bank accounts that user are using.
For example, in Air Asia some of American credit cards cannot be used by the user to make payments for booking the ticket flight. According to Cassandra James (2006), the Air Asia new payment system causes some of the American credit card cannot be used and take a long time for booking the ticket. She says that last time she has no problem using debit card and credit card to make payment until the new payment system come out, all her payment using it being declined and she has to take a long time to check to her bank and she attempts on Air Asia's website later, the payment finally went through.
Insecure Password
According to Yishan Wong (2009), some of the e-commerce website company was recently being hacked, with all user passwords stored in plain text was stolen above 32 million accounts. This is an awful security lapse, not just because it compromises user account, but because many users use the same password across multiple sites, so a file containing emails and plain text passwords means that the attacker can compromise a great many of these accounts for all those people across the web.
For example, it has problem on Air Asia systems where they're used plain text password. They're using the same password with same high security password, like email or bank account login. According to Juzhax (2011), the password that has plain text and no encryption is insecure where the password can easily be read from the hacker. One there gets the user password, they may try to access user email or other sites what the user login, because they can search username in Google. Inside the Air Asia system, they do allow used to store the credit card number inside, where the user credit card number maybe leak out to by the hacker.
E-commerce is not free
According to Emily Lonigro (2011), Every e-commerce site has these three pieces such as gateway, shopping cart, and fulfillment. Build a shopping cart to a client's specification is very expensive. Most carts are third-party and charge a monthly fee, therefore it has varying levels of difficulty and customization. In Gateway, it is the payment processor where it takes payments and puts them into a bank account. It connects the shopping cart with a processing network which checks for the necessary funds and either authorizes or denies payment where the fee is usually a percentage of the sale, around 3%. In the Shopping Cart, it is the site utility that collects items, deals with shipping, and handles other custom items like gift cards and custom messages. This utility sends the orders to fulfillment and the credit card details to the gateway. It's usually a monthly fee. In Fulfillment, it is the place that processes and ships the orders. This will cost of time, money, or sometimes can be both.
For example, Air Asia is known the cheapest airline industry compare to another airline. The Air Asia uses e-commerce to promote their sales promotion on ticket prices, where it is more expensive way to promote. Therefore, Air Asia has to spend more money to pay for e-commerce business to promote their ticket promotion where they also need to pay worker salary, government tax, supplier, equipment, services, and facility. If their ticket sales drop in future, it will effect them where there has problem to pay all the payment include the e-commerce fee.
References
· Lazarus, 2012, Disadvantages of E-commerce, viewed on 28 march 2012, from <http://wiki.answers.com/Q/Disadvantages_of_using_e-commerce>
· Ajeet. K, 2012, Disadvantages of E-commerce, viewed on 28 march 2012, from <http://ecommerce.about.com/od/eCommerce-Basics/a/Disadvantages-Of-Ecommerce.html>
· Peter. W, Thomas. W. M, Victoria. T. D, George. H, and Stephanie. W, 2005, Do Some Business Models Perform Better than Others - A Study of the 1000 Largest US Firms, viewed on 6 April 2012, from <http://ccs.mit.edu/papers/pdf/wp226.pdf>
· Juzhax, 2011, AirAsia is using plain text passwords, viewed on 8 April 2012, from <http://www.justin.my/2011/01/airasia-is-using-plain-text-password/>
· KambingBujang.com, 2008, Your Personal Information May Not Secure When You Travelling With Air Asia, viewed on 9 April 2012 from <http://kambingbujang.com/2008/04/04/your-personal-information-may-not-secure-when-you-travelling-with-air-asia/>
· Tyler. L, 1999, Advantages & Disadvantages of E-Payment, viewed on 9 April 2012, from <http://www.ehow.com/info_8188352_advantages-disadvantages-epayment.html>
· Cassandra. J, 2006, Air Asia's online booking system has problems - Some American credit cards cannot be used, viewed on 9 April 2012, from <http://www.examiner.com/asia-travel-in-national/review-air-asia-s-online-booking-system-has-problems-some-american-credit-cards-cannot-be-used>
· Network Solutions, LLC, 2012, What is e-commerce, viewed on 9 April 2012, from <http://www.networksolutions.com/education/what-is-ecommerce/>
· Scribed Inc, 2012, E-Commerce AirAsia, viewed on 9 April 2012, from <http://www.scribd.com/doc/24332975/E-Commerce-AirAsia>
· Yishan. W, 2009, Encrypting Your Plaintext Passwords, viewed on 9 April 2012, from <http://algeri-wong.com/yishan/encrypting-your-plaintext-passwords.html>
· Emily. L, 2011, Why are custom ecommerce sites so expensive, viewed on 9 april 2012, from <http://www.limeredstudio.com/blog/why_are_custom_ecommerce_sites_so_expensive/
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