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Section 5. World economy
Zasenko Oleksiy Yuriyovych, degree seeking applicant of the world economy and international economic relations Institute of International Relations before the Taras Shevchenko Kyiv National University E-mail: [email protected]
International electronic commerce as the form of appearance of scientific and technical revolution in the Area of trading relations
Abstract: Dissemination of Internet network, increase of the number of its users promoted development of regional and world electronic trade. However, different levels of social and economic development, different quality of infrastructure objects have significant influence at the rates of introduction of electronic commerce, its transformation at the steady system of economic links both — at the international and the regional level. The abovementioned stipulates the goal and the objective of this article, which is in studies of specific features of consolidation and unification of the latest tools of electronic commerce system in the world trade, establishment of the ways for introduction of innovation mechanisms for promoting development of international trade in the modern conditions of the economy.
Keywords: electronic commerce, electronic business, convergence of tools of electronic commerce system, international electronic trade, Model law, United Nations Organization on industrial development, harmonization of internal legislation norms, legal frameworks of electronic services, Internet technologies.
The basic tendency of the modern economy is move- Year by year more and more companies address the
ment towards globalization. Globalization of the econ- advantages of electronic commerce, which allows im-
omy, erasing the boundaries between the states in the proving profit rates, increasing the image in the view of
course of formation of the market relations, obliges the potential and key buyers and business partners, rapidly
economic entities both — inside the country itself and in moving to the new market, unavailable before.
separate regions, to operate and develop under the new The thesis of such foreign scientists as E. Bale,
principles. Modern economic relations are characterized B. Bousta, E. Wilkas, A. Garner, K. Kendall, S. Krug,
with development of infrastructure of exchange and in- Kh.Lefevre, M. Lindner, E. McCarthy, A. Summer and
teraction i. e. processes of exchange between the com- others are dedicated to research if specific features of the
panies, regions, states strengthen not only in the form of essence and perspectives of development of electronic
goods, services or finances turnover, but also in the form commerce in conditions of globalization and region-
of transfer of technologies, intellectual property objects, alization of the world economy. Significant contribu-
production funds integration. tion into research of the ways for introduction of modern
Modern theory ofthe humanity stipulates new condi- forms of international electronic commerce in condition for performance ofbusiness relations. Strengthening tions of the European integration of Ukraine belongs of competition, globalization of markets, rash scientific to such national scientists as V. Bryzhko, O. Vasylenko, progress in the area of communications and information M. Vozniy, T. Dubovyk, T. Zatonatska, I.Kartashova, technologies forces the entrepreneurs to search of new S. Kryvosheyeva, D. Panina, V. Pysarenko, V. Pleskach, modern methods of performing economic activity. Un- V. Poliakov, N. Chuchko and many others. However, the der such conditions one of the most important factors majority of researches are focused at analysis of certain for providing competitive capacity becomes using the elements that form business systems of electronic com-tools of electronic commerce. merce, determination of problems and inhibiting factors
of its development. Besides, in the modern economic literature structural constituents, tools and basic categories of scientific and technical revolution in the area of trading relations are not yet completely studied.
Notwithstanding the new possibilities and rapid growth of electronic sector of economy, its theoretical base is still at the stage of development. This is justified, for example, by the fact that till the present moment
there is no even generally accepted terminology in this segment of entrepreneur activity. At the same time, the essence of unification of notions, terms and institutions, which form the basis of the electronic segment of the economy, is evident. Absence of equality in implementation of the notional apparatus may lead to serious contradictions in legislative documents, moreover, discrepancies in the course of resolving the practical matters by lawyers, economists and other experts, working in the area of electronic commerce are possible, as well as discrepancies in thesis of various author, engaged in the issues f economics and law. However, there are no generally accepted definitions for «electronic business», «electronic commerce», «electronic trade» and other notions related to them at the present moment.
Under the definition by UNIDO (United Nations Industrial Development Organization), business stipulates four basic components: marketing, production, sales and payments. If two or more of these components are realized with the application of electronic systems, the business shall be deemed electronic.
International organizations use their own interpretations. This way, in WTO the «electronic commerce» is understood as production advertising, sales and distribution of goods with the help of telecommunication networks. In the materials of G8 countries it is defined merely as using electronic facilities (telephone, fax, TV, Internet etc.) to perform commercial affairs [1]. Within the frameworks of arrangement of economic collaboration and development the electronic commerce is understood as all kinds and forms of commercial affairs, including commercial activity of individuals and legal entities, based on processing and transmission of data in digital form, as well as text, audio and video transmission. The European commission defines electronic commerce as distance services, normally provided for remuneration by electronic method and upon the individual request to the recipient of the services.
In the «Model Law on Electronic Commerce» dated 1996, developed by the United Nations Commission on International Trade Law (UNCITRAL), it is stressed that this term should be interpreted widely, in order it
could cover the issues, flowing out of all relations of trading nature both — contractual and non-contractual. Electronic commerce, pursuant to the Model law, shall not be restricted with the limits of purchase and sales only, as it covers a number of commercial civil and legal deeds, which are entered into with the help of electronic moneys via Internet or via electronic networks [2].
Also in the literature there is no clarity in the terminology of electronic commerce. The notion «electronic commerce» and «electronic trade» are most often used as the same. Meanwhile electronic commerce now is not limited with transactions of purchase and sales and transfer of moneys via computer networks (electronic trade), it covers a wide circle of commercial relations, which does not permit make the notions of «electronic commerce» and «electronic trade» the same.
Taking into account the abovementioned, there a conclusion arises that to the commercial relations, containing a wide circle of civil and legal relations, it is worth implementing a wider term: «electronic commerce». The same point of view is observed by B. Bryzhko, who considers that electronic commerce is oriented at development of entrepreneur activity and improvement of the whole system ofadministration due to implementation of standards for data exchange and electronic document flow with the help of Internet [6]. Proceeding from mainly commercial (value) relations, which are covered by electronic commerce, it is possible to state that electronic commerce is, first of all, one of the forms of entrepreneur activity, which is mainly expressed through entrepreneur and procurement electronic activity with the purpose of obtaining profit and performed by electronic method.
Electronic commerce contributes to facilitating of the majority of business processes at the cost of their transacting by electronic means, with which the information is transmitted directly to the recipient, omitting the stage of creating a paper copy at each stage. The term «electronic commerce» combines numerous various technologies, among which there is EDI (Electronic Data Interchange), e-mail, Internet, intranet (information exchange inside the company), extranet (information exchange with the external world). Due to this some authors characterize electronic commerce as performing business via Internet. This way, we consider that electronic commerce should include any kind of business processes, with which interaction of the parties is carried out by non-contact means instead of exchange or direct physical contact.
Electronic commerce permits the companies more effective and flexible performance of internal transactions, tighter interaction with suppliers and faster reac-
tion to requests and expectation of customers. On the one hand, Companies receive the possibility of choice of suppliers irrespective from their geographical positions, on the other hand — the possibility to enter the global market with their goods and services.
The effectiveness and the competitive capacity of electronic commercial activity are based on using information and telecommunication technologies. Its specific features are the following:
• automation of the key business processes of the company (accounting of resources, financial accounting, documents flow, support of managerial decisions making) on the basis of creation of automated workplaces, assigned for automation of certain transactions and their uniting into the corporate information network;
• reorganization of structure and key business processes of the company on the basis of information and telecommunication technologies;
• development of network interaction with the existing and potential business partners, as well as with customers (Pic. 1).
So, electronic business shall be understood as any information exchange with the use of modern information and communication technologies. Electronic commerce represents the activity, oriented at obtaining profit from performing transactions in electronic form. Electronic trade is a type of trading format, within the framework of which trading transactions are performed at the market of electronic commerce. Also, having analyzed the definition of the notion of «electronic trade» of a number of authors, we can generalize this notion and provide our personal vision of this notion: international electronic trade if the sphere of sales of goods in the form of material products and services with the help of the world global network Internet.
Pic. 1. Correlation of categories of electronic trade, electronic commerce and electronic business
Analysis of historical principles of development of electronic commerce in the world will allow finding out general tendencies of its development and comparing them with the condition of Ukrainian companies. Development of electronic commerce in the past and now will help to mitigate the existing risks in this area, to reduce the time for introduction of basic mechanisms taking into account the past experience, to more effectively implement the existing tools in order to increase the effectiveness of a certain economic entity's activity and of the country on the whole. Entrepreneurs in the whole world rapidly discover new opportunities of Internet: fact access to sales market, which under the scope is the largest in the world, minimization of expenses for performing economic activity in Internet, wide opportunities for using marketing tools at the new, higher level etc.
During the last decades there were tendencies of rash development of information technologies observed, appearing of new methods of communications in the so-
ciety and business, new tools of its performance and communication influence. This way, one of the most developed and popular information technologies if Internet. Notwithstanding the simplicity of performing electronic business, openness, accessibility and democracy, the latter is a rather aggressive and little investigated environment, therefore it requires from the entrepreneurs, striving its mastering and performing, serious legal knowledge, adequately developed strategy, flexible tactics of performing transactions and distinct regulation of goals and objectives.
Innovation development of the economics depends on the tendencies in the society development. The main approach of innovations in the sector of trade is moving of commercial activity to Internet environment. Taking into account the progressive development of web-technologies and Internet-technologies electronic commerce rapidly creates volumes in the world scope and form as a separate industry of the economics. The basis
of development of the modern society is information and knowledge, which are the main products of production of information society. People, being the basis for the trade functioning, their level of mastering of information technologies, are the rate of the modern forms of commerce development.
In 1993 the essence of information society was disclosed by EU Commission: The information society is the society, in which the activity of people takes place on the basis of using services, provided with the help of information technologies and communication technologies [3].
In accordance with the position ofthe European commission the information society shall be understood as:
— the society of the new type, formed as the consequence of global social revolution in connection with rapid development and convergence of information and communication technologies;
— the society of knowledge, i. e. the society, in which the main condition for prosperity of each human and each state becomes knowledge, obtained due to free access to information and the skills to work with it;
— the global society, in which exchange of information will have neither time nor space nor political boundaries; which, on the one hand, will contribute to interpenetration of culture, and on the other — will open to each co-society new opportunities for self-identification [4].
Modern information society is characterized with a number of features, such as globalization, escalation of competition, rapid change of technologies, which makes adjustments to the traditional understanding of principles for keeping the economy. In the nearest future the majority of companies will use information technologies in their activity.
Construction of the information society is a strategic goal of the leading states of the world — the USA, Japan, Canada, as well as the European Union member-states. Realizing the importance of information and technical area as the key to competition capacity, the larger number of countries is concentrated at the development of the information society.
Having analyzed the data of statistic company Internet World Stats, we may state the fact that on the global scale there are such tendencies of the information society observed (infrastructure, electronic management, electronic services). As to the share of Internet-users the leading positions belong to Asia. First of all this is connected with large density of population of the region and the rapid spreading of information technologies. As to the level of spreading the Internet-technologies North America is the
leader, where 78.6% of the population uses Internet. As the region of well-developed, an average citizen may invest money into education and purchase of the necessary equipment. Besides, Internet-technologies are actively implemented to increase the effectiveness of business. In Africa the level of spreading of Internet-technologies makes only 28,6%. Such low rate is explained by weak development ofthe economics of the region and slow distribution of information and communication technologies.
As J. Schumpeter stated, without development there is no entrepreneur profit, and without the latter there is no development [7, P. 304]. In the modern conditions introduction of information and communication technologies gives the impulse to development of the economics in general and the trade in particular. Information support has reasoned formation of electronic commerce market.
The concept of «electronic commerce» appeared in the USA in 1980-ies as the result of development of earlier ideas of global information economics, which made the theoretical basis for creation of corporate information networks for using information technologies in the course of organizations functioning [5]. At the present moment it is possible to state that the nucleus of electronic commerce is information technologies, first of all the global networks, where exchange of goods and services takes place.
The world market of electronic commerce develops very rapidly. The main specific features of the regional development of the market of electronic commerce are as follows:
1. Well-developed economics of West Europe and North America still own essential shares of the market.
2. Rash growth ofAsia and Pacific region takes place, for which increase of the market volumes is forecasted by 10% till 2020.
3. Outsiders are East Europe, Latin America and Near East and Africa (table 1).
On the basis of the kind of interaction of electronic commerce system objects the following types exist:
1. B2B (business-to-business) — interaction of business structures in the area of electronic commerce (providing marketing, information services via Internet, Internet-bidding, sale of equipment for business etc.).
2. B2G (business-to-government) — interaction of the state and business-structures (various electronic solution, which are offered by entrepreneurs to the government, for example: FedCenter.com is the electronic market for the federal government of USA, PowerTrust. com — is the electronic operator at the energy market of
USA, StateGovCenter.com — is the electronic market, at which the local power bodies purchase the necessary products).
3. B2C (business-to-customer) — is the system of electronic trade, oriented at the end consumer (Internetstores of retail trade).
4. C2C (customer-to-customer) — is the system of electronic commerce, formed on the basis of interaction
Table 1. - Volumes of sales in the area of electronic
of buyers between each other (example — Internet-auction eBay).
5. G2B (government-to-business) — is a set of software and hardware facilities for online interaction of the executive power and the commercial structures with the purpose of support and development of business. The systems of G2B may include information web-sites of power bodies.
trade in the world regions, 2008-2018, $ billion *
Region Volume of sales in the area of electronic trade, $ billion.
2008 2013 2018
North America 58.6 125.8 249.8
West Europe 57.2 97.7 184.3
Asia 20.6 70.4 162.9
Latin America 3.9 9 16.9
Central and East Europe 1.2 5.2 15.2
Central and East Africa 0.1 0.2 0.3
* — made by the author on the basis of [11].
The most developed in the world is electronic commerce B2B (about 80% of all volumes), but in the developing countries, turnover in B2C sector prevails.
Let us analyze the tendencies of development of e-commerce B2B at the example of USA. The market of electronic commerce in this segment twice exceeds B2C segment at the volume. The largest players at the market are SAP, IBM, Oracle and Intershop. In 2015 the market of technological solutions for electronic commerce B2B in USA constituted USD 718 billion, at the market B2C — USD 342 billion. (under the information of Forrester Research) [13]. Generally the market of e-commerce B2B contains much larger potential of growth and is more perspective for investments.
On the global scale rash growth of electronic commerce B2 C market is observed. Over 2013 its world turnover exceeded USD 1 trillion, and in 2014 — about USD 16 trillion. (under the information of UNO, 5% of the world turnover of goods and services sales) [12].
Sector B2C of electronic commerce has the following regional characteristics:
1. North America, Asia and Pacific region and West Europe cover 90,1% of the world volume.
2. In 2016 the world leader under the sales volumes the North American region will remain.
3. The USA remain the country with the well-developed market of electronic commerce, where the volume of electronic trade in 2018 under the forecasts will make USD 249.8 billion [11].
Under the information of emarketer.com, volumes of Internet-sales B2 C up to the end of 2015 increased
to USD 1700 billion, and the number of buyers reached 1 billion persons. Up to 2018 it is forecasted increase of the sector up to USD 2,36 trillion. Such tendencies are reasoned by increase of the number of buyers, development of new methods of delivery and payment, opening by large companies of digital shop-windows, entering new markets [14].
Rash development of the new markets is the key characteristics ofelectronic commerce on the global scale. The Agency A. T. Kearney developed the list of 30 the most competitive countries on electronic commerce, among which the leaders are China, the USA and Japan. The top-ten of the mist perspective ones includes also three West-European markets: British, German and French [9].
The highest growth rates are observed in China, where the rate of turnover of electronic commerce in 2014 made USD 1,45 trillion (2,5% GDP of the country). Also the number of online-buyers grows rapidly. If in 2010 in the area of electronic commerce in China it made 140 million persons, in 2015-520 million persons. In USA the number of online-buyers increased from 140 million up to 200 million persons in 2015 [10].
In China large companies of electronic commerce are developing. In particular, «Alibaba Group» is the operator of the largest platforms of electronic commerce. Its turnover in 2014 made over USD 300 billion and exceeded the turnover of «eBay» and «Amazon». Net profit of the company over the 2nd quarter of 2014 made USD 717 million, or by 145% more than in 2013.
Under forecasts, the Chinese market of purchases via Internet will grow by 30% every year and will
reach USD 385 billion by the end of 2015. Growth of sales via Internet in 2014 was contributed by introduction of service «online-to-offine» (O2O). The largest shopping-centers develop their collaboration with online-platforms, which gives the opportunity for consumers to select things offline, and then to buy them under reduced prices in the Network. Also the market of online sales will rapidly grow due to introduction of telecommunication technologies of the fourth generation, which will give the opportunity to reach more speed and availability [8].
Consequently, the process of globalization and reaching scientific and technical progress has opened new opportunities for the economic development,
namely — development of information electronic trade and formation of information production. In fact using information and communication technologies is the most important objective of perspective development of national economies and international trading, production and scientific and technical links. Less than over a decade significant changes have taken place in the world, as the result of which the world electronic commerce became the integral part of external economic activity of the economic activity entities. The electronic economic under formation objectively reasons creation of electronic relations system between private companies, government and business, government and population and electronic system of international links.
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