New E-commerce is still in its formative stage. The business-to-business and intra-organizational segments currently dominate e-commerce. Many major digital retailers are as yet in the investment and brand-building mode and show no profits; yet many established retailers realize profits from the new selling channel. Buoyant growth is apparent throughout.
The hierarchical framework presented above offers an opportunity to separate concerns and analyze the specific aspects of this enterprise. The technological infrastructure currently imposes several limitations on the development of a global market-space and on the personal convenience of the participants. An integrated consumer-oriented transaction space is yet to emerge. The consumer marketplace is being developed by a large number of entrepreneurial initiatives, many of them experimenting on the frontiers. Moving the links of supply chains and products into market-space offers a major promise in raising economic efficiency of both manufacturing and service industries. As these moves take place and as the supply chains are reconfigured, many new firms may be expected to emerge and specialize around newly redefined core capabilities. The business models of many existing firms will be threatened. Although several intermediary roles are threatened by E-commerce, others are not, and new intermediary opportunities emerge.
The capabilities of the new marketplace that combines the properties of a medium with that of a global location will be exploited to redefine many products and marketplaces. Notable are the possibilities to provide customized products, in the process moving ever larger segments of the supply chains to the Internet, branding through bonding to a Web site and thus to its sponsor, the advantages of virtual auctions, and the possibility to create large reverse markets.
New E-commerce will present over time countless opportunities and challenges to our economies and societies. Expansion of commerce and technological innovations are two of the levers of economic growth. These forces are combined in the progress of E-commerce. The macroeconomics effects of E-commerce on the national and regional economies, and on the international trade and its terms will need to be assessed and analyzed. The prevailing judgment at this stage of E-commerce development is to allow free-market forces to assert themselves unhampered by excessive government regulation. The traditional institutions, such as banks of issue, commercial banks, universities, established business intermediaries, media and publishing companies, would find a need to redefine their roles in the new environment. The taxability of products traded globally over the Internet is as yet an open issue. Intellectual property that can be converted to on-line content may find itself reevaluate in the global marketplace.
The tension between the transactional efficiency of spot purchasing facilitated by electronic markets and the need for long-term relationships of trust and forbearance, enabled by electronic hierarchies, will persist and call for much study. The geographical limitations that have bound the place of residence to the place of work, and that have already been eroded by the growth of telework, may be expected to be even less binding. Indeed, the possibilities of the loss of rural space to the new ex-urbanites are already causing environmental alarms. A number of countries that had been marginalized by their geographical position take extremely active interest in E-commerce as the means to move to the center of the virtual geography. The redistribution work has to be studied from multiple perspectives.
E-commerce has entered a stage of rapid and sustained development. A large number of business models have been enabled by it. A number of questions have been posed here. All of these and many others will require further experimentation, experience, observation, analysis, and research.