E-Commerce and Customers in the United Arab Emirates - Example

E-COMMERCE AND CUSTOMERS Name: College: Course: Tutor: Date: E-Commerce and Customers Abstract The relationship between electronic commerce and customers is investigated in a bid to understand how it influenced customer behavior and satisfaction, business performance and improvement, utility of technology, product definition, service provision, style of doing business, effectiveness of technological approaches, future expectations. A qualitative research employing the review of literature approach was employed. The study revealed that internet-based technologies and particularly social media platforms had transformed traditional customers to information age customers. These customers were thirsty for information, regular, spontaneous and continuous communication and valued convenience, which explained the proliferation of social media use and mobile technologies. However, for trading purposes, these customers were skeptical about the level of trust they should proffer to e-commerce offerings, due to privacy and fraud concerns. The study concludes that while the creation of free zones in the United Arab Emirates and particularly Abu Dhabi was commendable, leveraging of e-commerce could bolster international trade in these cities in particular. Keywords Electronic commerce in the Gulf region, Electronic import/export business transactions, e-commerce customer. Introduction Background of the study Cities located in the United Arab Emirates (UAE) are increasingly participating in regional and international trade particularly with proliferation of globalization and advances in information and communication technologies. Even though e-commerce activities in this region account for the lowest percentage on the global state, the UAE takes up the largest share of e-commerce activities in the region according to Muhannad and Ahmed (2014). The business environment in the UAE is vibrant and competition with high-income countries is favorable, considering that although the country is young comparatively, having been formed in 1971, it is the fastest growing market for electronic commerce in the world. With e-commerce in the country being expected to reach ten billion dollars by 2018, UAE makes an interesting and curious location wherein the relationship between electronic commerce and customers can be investigated in a backdrop of the country being a major hub of global import/export trade and the benefits and detriments to such trading that electronic commerce can proffer. Problem statement The rapid development and expansive proliferation of wireless information and communication technologies have presented new opportunities as well as challenges for companies and customers alike. With the heavy adoption of mobile communication devices across all regions of the world, businesses have jumped onto expanding their market reach while customers have enjoyed unprecedented access to goods and services proffered by companies located near and far from them (Siyavooshi, Sanayei & Fathi 2013). In addition, a significant proportion of online trade was being transacted between business organizations (Sila 2013). Further, the customers of the current information age is markedly different from the traditional customer, particularly in the large diversity of needs, wants and preferences, the high discernment and their increasing distance from the business organizations. The United Arab Emirates has become a major hub of international business due to its central location between the east and the west regions of the world. Import and export trade is a business activity that countries in the United Arab Emirates have consciously decided to adopt and increasingly engage in as their oil reserves, which are the countries’ major source of revenue, dwindle gradually. However, while the effect of wireless information and communication technologies on commerce, the transformation of the customer in the face of emerging communication technologies and the proliferation of internet use have been studied, the focused of these studies have been concentrated in locations, particularly those that are highly industrialized other than in the United Arab Emirates. Significance of the study This study has important implications to not only the growth of the international trade that cities such as Abu Dhabi engage in, but can also inform on how to satisfy their diverse customers who are expansively dispersed all over the world. Indeed, this study can provide valuable information on how such cities can target international customers more accurately with effective market-based segmentation strategies and customer-centric approaches as well. Research question This study strives to answer the question regarding the definition of the relationship between electronic commerce and customers concerning customer behavior and satisfaction, business performance and improvement, utility of technology, product definition, service provision, style of doing business, effectiveness of technological approaches, future expectations. This question though broad, focuses on the export and import trade environment in the city of Abu Dhabi and the effects that electronic customers has had on the wide variety of customers associated with international trade conducted in this city. Research objectives The objectives of this research were: a) How does electronic commerce influence customers? b) What are the benefits does export and import trade derive from electronic commerce? c) What are the advantages and disadvantages of using electronic commerce? Literature review This section previews researches that have been conducted in the area of electronic commerce, particularly those that help enhance knowledge about what electronic commerce entails. In addition, studies that inform on what import and export trade in the United Arab Emirates as part of international trade entails, and what the characteristics of customers who engage in electronic commerce are, will be interrogated, with a view of gathering information that could be used to answer the research question. To this end, this section is arranged in three subheadings, which are electronic commerce, customer in the information age, and import and export trade. Electronic commerce Electronic commerce, also known as e-commerce is business activities that have been facilitated by internet technologies in the local, national, regional and international arena. According to Trezy (2011), business transactions conducted over the internet make up electronic commerce. Therefore, electronic commerce can be perceived as a product of technological advancements of the twenty first century. Studies have illustrated how pervasive information and communication technologies and particularly the internet have transformed the manner in which people conduct their daily activities in almost all spheres of life starting from engaging in leisure activities to conducting serious business and research as well (Trezy 2011; Wu et al. 2012). Other studies have illustrated the impact of the internet on education, research and development, trade, communication, healthcare, and even the activities of governments. Customer in the information age Information about products and services available in the market is highly desired by customers regardless of their needs and location. However, traditional customers relied on print media, physical visits to stores and face-to-face interaction with other customers to provide them with pertinent product and service information that would help them make purchase decisions (Solaymani, Sohaili & Yazdinejad 2012). Even after buying decisions had been made, the traditional customer paid for goods and services by physically walking up to the seller or though bank transfers and cheques, which required physical visitations to the banks. However, the information age has transformed the traditional customer into a highly informed customer who employs technology to shop without even making any visits to the seller or the bank, thanks to advancements in information and communication technologies. Numerous studies of how the modern customers interacts with technology have been performed in a bid to understand their motivations, perceptions, and concerns regarding the employment of emerging and ever transforming technologies in procuring goods and services. For instance, Hahn and colleagues (2016) investigated how advertisements on social media influenced the trust and emotional response of customers and found out that for advertisements relayed on the social media, trust influenced the emotional response of customers, thus influencing brand evaluation. Other studies performed by Siyavooshi, Sanayei and Fathi (2013) and Wu and colleagues (2012) revealed that e-commerce customers were concerned about the privacy of their personal information while a study by Muhammad and Ahmed (2014) found that customers in the United Arab Emirates were concerned safety of their online payments. Social media have become a big influencer of e-commerce because of its rapid uptake by people. Studies have indicated that customers congregated in social networks just as they would do physically, to share they service, product and shopping experience (Constantinides, Brünink & Lorenzo–Romero 2015; Gu & Ye 2014; Martin, Mortimer & Andrews 2015; Valvi & Fragkos 2012). Import and export trade While import/export trade has a longstanding history in human civilization, advancements in technology and globalization have extended its reach from simple cross border trade to trading between entities who are far flung from each other. Many studies have indicated that the bounds of import and export trade have expanded tremendously and in an unprecedented manner, yet the import/export business was riddled with many challenges. For instance, Hassan (2013) exhibited how the growth of import/export business was influenced by exchange rate volatility. Another study by Shayah and Qifeng (2014) explained how the growth of import and export business in the United Arab Emirates had been facilitated by the development of free zones, which were aimed at reducing the barriers of trade associated with tariffs and government regulation. Research methodology and strategy A qualitative research employing the review of literature methodology was employed in this study. Peer reviewed articles, organizational publications and credible news articles were sought for in the various databases using and internet search. Search engines such Google Scholar and Microsoft Academic Search were used to query databases such as EBSCOhost and Academic Search Premier for relevant articles using keywords as search guides. The keywords used to facilitate the internet search included e-commerce and international trade, e-commerce and customers, e-commerce and import/export trade, and e-commerce in the United Arab Emirates among others. The search criteria included relevance as guided by the research objectives, currency of publications, which was limited to information published within the last 10 years, with preference being provided to those published within the last five years. The abstracts, introductions and conclusions of the publications were perused to determine their relevance to the study. Data analysis results The information derived from the review of literature was sorted for common themes that were directed by the research objectives. The themes composed from the research questions included a) influence of electronic commerce on customers, b) the benefits electronic commerce proffers to import and export trade, and c) the advantages and disadvantages of using electronic commerce. Thereafter, the information gathered was collated according to the knowledge they added towards these themes. The analysis of this information was arranged thematically to facilitate the answering of the research question, which can be summarized as what is the definition of the relationship between electronic commerce and customers. Discussion Import and export business was increasing in the United Arab Emirates because of the increasing diversification of the economies of these countries that was aimed complementing the dwindling oil reserves that have been the foundation of these economies (Shayah & Qifeng 2014). To this end, many cities in the United Arab Emirates such as Abu Dhabi and Dubai, which were located along the coastline had developed free zone areas to facilitate the growth of the import/export business in this region. Technology was increasingly being employed in trading activities due to the many benefits it provided. Benefits included rapidity of communication without regard for distance between the buyers and sellers, the great reach of technology, which removed the distance barrier, and ease of access and cost effectiveness emanating from the low cost of technology. Therefore, traders employed social media technologies in particular, for marketing their products and services and building customer loyalty. In addition, transactions could be seamlessly undertaken over the internet. Further, customer interactions online had changed the way companies dealt with customer complains. In this regard, complains were dealt with publicly unlike the traditional situation where customer complaints were handled in private an often were not publicized (Gu & Ye 2014). Therefore, the e-commerce environment had influenced the manner in which companies operated their businesses presenting many opportunities for expansion in the global market while at the same time presenting challenges associated by increased public scrutiny and concerns about privacy and confidentiality of customer personal information (Martin, Mortimer & Andrews 2015). The characteristics of customers engaging in e-commerce can be explained using various theories. For example according to Sila (2013) and Solaymani, Sohaili & Yazdinejad 2012), the technology acceptance model can be used to explain the adoption of internet-assisted technologies for trading activities among customers. The theory asserts that the users’ beliefs and intentions regarding a new technology determined its adoption. In the same light, diffusion of technology theory suggests that individuals utilized communication strategies in a social system in order to make decisions regarding the adoption or rejection of new technologies. The theory of planned behavior can be used to explain the behavior of online customers by advancing the precept that behavior of an individual was intentional, which was informed by the prevalent subjective norms and attitudes toward the said behavior as well as the behavioral control perceptions that were in place. From these theories, the rapid adoption of internet-based technologies was facilitated by the advent of social media platforms, which not only appealed to the community-forming needs of users and the convenience in communication that these technologies proffered (Ngo-Ye & Sinha 2014). In fact, the fast adoption of social media can be credited for the increasing adoption of e-commerce among customers. However, trading companies needed to comprehend the immense power that social media held over existing and potential customers (Constantinides, Brünink & Lorenzo–Romero 2015). Such comprehension could help traders in Abu Dhabi for instance not only understand their customer needs, preferences and concerns but also help traders devise way by which they can convert prospects to customers, retain existing customers and use customers as brand ambassadors in the marketing process. To this end, traders needed to engage with their customers over social media in particular, due to its high proliferation in the global market. Recommendation While the adoption of the free zone model was effective in facilitating the growth of the import and export trade in Abu Dhabi and the entire Gulf region, the adoption of social media technology needed to facilitated in order to take advantage of e-commerce. This approach can be justified by the high proliferation of mobile technologies all over the world and the increasing adoption of e-commerce by customers near and far. Conclusion Advancements in information and communication technologies have transformed the traditional customer to an information age customer. The internet and social media have powered electronic commerce and with it, created customers who engage in trading activities and transaction from the comforts of their homes or preferred locations and share their trading experiences regularly and publicly. In addition, the information age customers seek information about the products and prices they intend to purchase, and make public reviews that can influence the performance of the trading companies. Appendices Appendix 1: screenshots from EBSO References Constantinides, E, Brünink, LA & Lorenzo–Romero, C, 2015, ‘Customer motives and benefits for participating in online co–creation activities’, International journal of internet marketing and advertising, 9, 1, pp.21-48. Gu, B & Ye, Q, 2014, ‘First step in social media: Measuring the influence of online management responses on customer satisfaction’, Production and Operations Management, 23, 4, pp.570-582. Hahn, I, Scherer, F, Basso, K, & dos Santos, M 2016, 'Consumer Trust in and Emotional Response to Advertisements on Social Media and their Influence on Brand Evaluation', Brazilian Business Review (English Edition), 13, 4, pp. 49-71, Business Source Complete, EBSCOhost, viewed 19 March 2017. Hassan, M, 2013, ‘Volatility of exchange rate affecting trade growth-a case of Pakistan with US, UK and UAE’, European Scientific Journal, 9, 22, pp. 1857-7881. Martin, J, Mortimer, G & Andrews, L, 2015, ‘Re-examining online customer experience to include purchase frequency and perceived risk’, Journal of Retailing and Consumer Services, 25, pp.81-95. Muhannad, K & Ahmed, G, 2014, ‘Customer perceptions of e-commerce in the United Arab Emirate’, International Journal of Global Business, 7, 1, pp. 95-109. Ngo-Ye, TL & Sinha, AP, 2014, ‘The influence of reviewer engagement characteristics on online review helpfulness: A text regression model’, Decision Support Systems, 61, pp.47-58. Shayah, M H & Qifeng, Y, 2014, ‘Development of free zones in United Arab Emirates’, In First Middle East Conference on Global Business, Economics, Finance and Banking, Dubai. Shayah, M H & Qifeng, Y, 2014, ‘ Development of free zones in United Arab Emirates’, In First Middle East Conference on Global Business, Economics, Finance and Banking, Dubai. 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Wu, K W, Huang, S Y. Yen, D C & Popova, I, 2012, ‘The effect of online privacy policy on consumer privacy concern and trust’, Computers in Human Behavior, 28, 3, pp.889-897. Read More