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E-Commerce Challenges and Solutions

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 E-Commerce Challenges and Solutions
Zunawanis Mustafa
Mohd Shahrulnizam Abu Hassan
Mohamad Dhiyauddin Abd Aziz
Faculty of Computer and Mathematical Sciences
Universiti Teknologi Mara
Shah Alam, Selangor
{dzunahu, shahrul85, dayau89}@gmail.com

Abstract – The explosion of e-commerce businesses
has seen the growth of number of the online
businesses worldwide. Consumers nowadays are
opted with online business commerce which is
considerably convenience compared to traditional
transactions. Deniably, e-commerce enterprises
offer more benefits, comparing to “bricks-and-
mortal” traditional enterprises, but not to be
missed the issues and challenges faced by the e-
commerce enterprises. This study highlighted the
issues and challenges of e-commerce and a set of
proposed solutions to those issues and challenges.
Among the issues are trust, readiness and security.
For each of the issues and challenges, proposed
solutions are presented.
Keywords – E-commerce; trust; readiness;
e-commerce security
I. INTRODUCTION
The combination of the Internet and e-
commerce usage has produced a new online
atmosphere that is extremely efficient and effective
[1]. The feasibility features offered by e-commerce
has swiftly transforming the way in which enterprises
communicating with each other, as well as with
consumers and governments. The use of e-commerce
on micro and small enterprises; and in the service
sectors has a noteworthy blow on firm performance
[2].
Most of the international players and the
largest e-commerce enterprises, measured by online
revenue, come from the United States and China.
Those companies are Amazon.com (United States),
JD.com (China), Dell (United States) and Jia.com
(China). Enterprises like Alibaba Group (China),
eBay (United States) and Rakuten (Japan) provide
platform which allow individuals and small
businesses to offer their goods and services online
[2]. In 2013, the top e-commerce enterprises in term
of gross merchandise value were the Alibaba Group,
followed by Amazon and eBay [2].
Deniably, e-commerce enterprises have
offered a proven number of prospective benefits like
better market access and reach, lower cost for
dealings for both buyers and sellers, improvement
over domestic and market efficiency, as well as
enhancing involvement in international value chains,
but not to forget, the issues and challenges face by
new or existing players in the sectors [2].
II. LITERATURE REVIEW
Researchers have defined e-commerce in
many versions. Using the Organization for
Economic Cooperation and Development (OECD)
version, e-commerce can be defined as [3]:
“The sale or purchase of goods or services,
conducted over computer networks by
methods specifically designed for the
purpose of receiving or placing of orders.
The goods or services are ordered by those
methods, but the payment and the ultimate
delivery of the goods or services do not have
to be conducted online. An e-commerce
transaction can be between enterprises,
households, individuals, government, and
other public or private organizations. To be
included are orders made over the web,
extranet or electronic data interchange. The
type is defined by the method of placing the
order. To be excluded are orders made by
telephone calls, facsimile or manually typed
e-mail.”
There are four types of e-commerce; business-to-
business (B2B), business-to-consumer (B2C),
consumer -to-consumer (C2C) and business-to-
government (B2G). Although the mainstream
research tends to focus on B2C without making any
difference between B2C and C2C, but C2C e-
commerce has been found to be more popular [1].
A. Business-to-business (B2B)
B2B can be defined as the transaction between
businesses, for instance, between a wholesaler and a
retailer, or between a manufacturer and a wholesaler
[2]. The total value for this sector is more than $15
trillion in 2013, as estimated by UNCTAD [2].
B. Business-to-consumer (B2C)
B2C is the sales by “pure-play” e-commerce
enterprises. Measured by both online buyers and by
revenue, China emerged as the largest global market
for B2C e-commerce and the market is expanding
rapidly, especially in Asia and Africa [2].
Consumers can be reached via broad range of
channels including dedicated e-commerce websites,
social networks, crowd sourcing platforms, mobile
applications and so on [2].
C. Consumer-to-consumer (C2C)
C2C is considered as the modern version of
classified marketing in newspaper or going to a
public sale. It provides a platform offering potentials
for casual enterprises to engage in e-commerce. In
general, C22 like eBay or Taobao covers online
public sale and sales within the online communities
[2].
D. Business-to-government (B2G)
The B2G dealing is similar to B2B, except that
instead of business, the customers are a government
entity. Example of this sector is public e-
procurement [2].
III. RESEARCH METHODOLOGY
This study uses mainly secondary data,
which are journals and formal reports. Recent
academic journals were selected, ranging from the
year 2011 to 2015. The databases used are from
IEEE and ScienceDirect. Google Scholar was used
as the initial platform to gather relevant articles. The
contents of each journal were browsed, and then
collected. No new model or framework was derived
from this study.
IV. CHALLENGES
A. Trust
The trust between sellers and buyers plays an
important role for any successful e-commerce
transactions. Yoon and Occena [1] have found out
that trust is the fundamental problem in e-commerce
environment. Comparing to traditional commerce,
trust is more important in e-commerce because goods
and services purchased over the Internet cannot be
immediately verified and also because of the lack of
rules and regulation in e-commerce [1].
B. Readiness Level
Readiness level is another factor of the e-
commerce challenges. Kurnia et al. [4] presented a
framework consisting three levels of readiness which
are Organizational Readiness (OR), Industry
Readiness (IR) and National Readiness (NR).
1) Organizational readiness level
Kurnia et al. [4] defined this first level of
readiness in the context of perceived benefits (PB)
and perceived organization resources and governance
(PORaG). PB is used to explain how a certain
technology is perceived to be advantageous to an
organization. In this context, PB takes into
consideration, the costs, risks, threats, opportunities
and compatibility of the innovation with the existing
processes, culture, existing requirements and
infrastructure. Meanwhile, PORaG is referring to
organizational perceptions of the resources
availability which including financial, technology
and human resources [4].
2) Industry readiness level
Industry readiness denotes the readiness in
nurturing e-commerce technology adoption, given the
fact that small and medium enterprises (SMEs)
having fewer influence and power comparing to
larger organizations [4].
3) National readiness level
This level is referring to the availability of
services in a country that support the adoption of e-
commerce technologies.
C. E-commerce Security
E-commerce security shares the same issues with
cyber security. The dimensions can be categorized as
below [5]:
1) Integrity – making sure the data or information
are not modified or tampered by any
unauthorized persons and not using them without
users’ permission.
2) Non-repudiation – making sure not denying any
sale or purchase.
3) Authentication – making sure that only
authorized persons are allowed to logon to
system.
4) Confidentiality – sensitive data and information
are encrypted and not easily broken.
5) Privacy – the ability to manage the term under
which private information is acquired and used.
6) Availability – the software system is always
available and the hardware equipments are
working properly, and in the case of disaster, the
system is able to recover quickly [6].
According to Ladan [7], e-commerce security
strategies dealing only with two main issues:
protecting the business network integrity and the
internal systems, and accomplishing secure
transactions between the customer and the seller.
V. PROPOSED SOLUTIONS
A. Trust Solutions
Noor et al. [8] proposed a trust framework for
social commerce which consisting of Usefulness,
Ease of Use, Security, Privacy, Website Design and
E-word of mouth. The study that focuses on S-
commerce which is also applicable for E-commerce
since it’s a subset of E-commerce.
According to the researchers, usefulness is the
degree to which user recognizes the commerce site to
be beneficial and the user’s decision and perception
to the business transaction are affected by this factor
[8]. The next factor that influences the online trust is
ease of use.
Yoon and Occena [1] stated that a notable
attempt must be made to improve the website quality
and enhance the third-party recognition (TPR).
Using gender and age as the control variables, their
research is to investigate the trust in C2C e-
commerce. Younger generations are affected by the
quality of an e-commerce website that influence them
to become real online purchasers [1]. E-commerce
enterprises should come out with a different strategy
to cater for different target of consumer’s age. For
the TPR, E-commerce websites have options to use
third-party seals of approval like TRUSTe or
BBBOnline for endorsing the privacy seals since
users consider them important and are more likely to
provide personal information over the Internet [1].
For the enterprises targeting consumers over 40 years
old, the trust can be established by providing
communities that let consumers to give feedback
since the customers’ feedback and comments can
influence other customers [1]. Other researchers [8,
9] agree that recommendation from family or friends
or word of mouth are considered an effective factor
on reputation and trust.
Zhang [10] stated that, the trust factors for e-
commerce can be measured in the form of; item as
described in the website, service manner, and
shipping time of the products or services. Using
Taobao.com as the model for the study, the
researcher mentioned the weaknesses existing in the
Taobao rating system. Taobao.com is the China’s
largest C2C online marketplace [1, 2] where 90
percent of the transactions comes from China [2]. In
2011, the total business transactions is about 600
billion Yuan [10]. Since almost all C2C enterprises
in China has been adopting the same trust models like
Taobao, the researcher has proposed a few
countermeasures; transaction price weight, time
attenuation coefficient, and trust factors weighted to
overcome the disadvantages of Taobao adopted trust
models [10].
B. Readiness Solution
In order to encourage enterprises, especially
SMEs, to adopt e-commerce technologies, the
collaboration between industry partners and the
government should take place. The government and
industry partners need to help SMEs to build and
maintain their structures, domestic organizational
resources and governance in order to fit well with e-
commerce technologies [4].
The responsibilities of policymakers also play an
important role. To increase the awareness of industry
standards and structures should be taken by the
policymakers [4]. Furthermore, technological
resources, human and financial should be provided to
facilitate the adoption of e-commerce technologies
[4].
C. Security Solution
Ladan [7] stressed out that every e-commerce
system should have security measures because it is
one of the most important features for e-commerce.
Security measures should be applied at all levels that
including business applications, the enterprise
internal networks, front-end clients and servers, and
also data and information interactions [7]. The
installation and configuration of firewalls and the
implementation of DMZ in the enterprises networks
 should prevent unauthorized access [7]. In addition,
security can be enhanced further by network
segregation, strong data encryption, and intrusion
detection system (IDS) installation and configuration
[7].
Meanwhile, Matbouli and Gao [6] have
identified five security measures to minimize the
threat posses by e-commerce security. The measures
are:
1) Education – the awareness and knowledge
among the consumers regarding the e-commerce
security should be taken into consideration.
2) Secure Socket Layer (SSL) – the use of public
key encryption in SSL ensures the
confidentiality, data integrity, authentication, and
non-repudiation.
3) Personal Identification Number (PIN) – the use
of email callbacks to confirm each transaction.
4) Personal Firewalls – having a firewall is
important to help protect a computer
5) Security Policy – having a clear security policy is
crucial step to secure an e-commerce business
enterprise.
in Advance Computing Conference (IACC), 2015 IEEE
International, 2015, pp. 393-396.
[6] H. Matbouli and Q. Gao, "An overview on web security
threats and impact to e-commerce success," in
Information Technology and e-Services (ICITeS), 2012
International Conference on, 2012, pp. 1-6.
[7] M. I. Ladan, "E-Commerce Security Issues," in Future
Internet of Things and Cloud (FiCloud), 2014
International Conference on, 2014, pp. 197-201.
[8] A. D. Noor, R. Sulaiman, and A. Abu Bakar, "A review
of factors that influenced online trust in social
commerce," in Information Technology and Multimedia
(ICIMU), 2014 International Conference on, 2014, pp.
118-123.
[9] F. Meskaran and Z. Ismail, "Customers' trust in e-
commerce: In collective culture setting," in Information
Retrieval & Knowledge Management (CAMP), 2012
International Conference on, 2012, pp. 182-186.
[10] Y. Zhang, "Research on trust issue of current chinese
c2c e-commerce: Problems and solutions," in Trust,
Security and Privacy in Computing and
Communications (TrustCom), 2012 IEEE 11th
International Conference on, 2012, pp. 1423-1428.

VI. CONCLUSION

As the digital economy is expanding rapidly

and affecting more enterprises activities, it is
important to take into consideration the proposed
solutions for the mentioned issues and challenges of
e-commerce business. Even though e-commerce
enterprises could be from any types, basically they
share the common issues and challenges.

REFERENCES

[1] H. S. Yoon and L. G. Occeña, "Influencing factors of

trust in consumer-to-consumer electronic commerce
with gender and age," International Journal of
Information Management, vol. 35, pp. 352-363, 2015.
[2] UNCTAD, "Information Economy Report 2015-
Unlocking the Potential of E-commerce for Developing
Countries," 2015.
[3] OECD,
https://www.wto.org/english/tratop_e/ecom_e/wkprog_
e.htm (accessed 20 April 2016), 2011.
[4] S. Kurnia, J. Choudrie, R. M. Mahbubur, and B.
Alzougool, "E-commerce technology adoption: A
Malaysian grocery SME retail sector study," Journal of
Business Research, vol. 68, pp. 1906-1918, 2015.
[5] S. Chatterjee, "Security and privacy issues in E-
Commerce: A proposed guidelines to mitigate the risk,"

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