An Example of E-Commerce Failure and its causes

Story of Webvan

Webvan was an online credit and delivery grocery business. It was headquartered in Foster City, California, USA, near Silicon Valley. It delivered products to customers’ homes within a 30-minute window of their choosing. At its peak, it offered service in ten U.S. markets which included San Francisco Bay Area, Dallas, San Diego, Los Angeles, Chicago, Seattle, Portland, Atlanta, Sacramento and Orange Country. The company had originally hoped to expand to 26 cities. However, this hope was spoiled when this company went into bankruptcy in year 2001. Approximately 2000 employees had been let go as a result of the shut down.

What causes this matter to be happened?

Too focus on customer service and neglect the profit in long term

Customer service is important. Any business could provide infinitely good customer service but have to balance the need to serve customers with profits. In this case, Webvan was popular with its good customer service but this company was too focus on this short term profit and had neglected that this service would not bring any profit for them in the long term. Not all people could afford its high delivery fees and as a result, it had not attracted enough customers to sustain its business and thus it need to shut down the company.

Too much of capital expenditure

While Webvan was building up its empire of tech warehouses and fleets of delivery trucks, it eventually ran out of money because the money spent on infrastructure far exceeded sales growth of the company. The $1 billion spent on the infrastructure had affected the company’s financial liquidity. Webvan was unable to cover all these expenses and in the end, it had no choice to wind up the company.

Conclusion

The demise of Webvan indicates an unhappy tale for other companies which having online grocery business. It is not easy to conduct E-commerce. Good knowledge and experience in IT and management is important to conduct a business online. Therefore, I hope that Webvan’s failure may help you a lot.

~For more information, please refer to following websites

http://en.wikipedia.org/wiki/Webvan

http://news.cnet.com/2100-1017-269594.html

http://www.wired.com/techbiz/media/news/2001/07/45098

http://www.ecommercetimes.com/story/12028.html

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An example of an E-Commerce success and its causes

When all passengers visit our blog which is “E-Commerce Airline”, can you think of any airline companies in Malaysia? My inspired answers is AirAsia and Malaysia Airlines which both are successful in E-Commerce online transaction but the most popular E-Commerce website of airline companies is AirAsia.

Story of AirAsia in E-Commerce success and its causes

AirAsia Berhad is a low-cost airline in Malaysia. It operates scheduled domestic and international flights and it is Asia’s largest low fare, no frills airline. The most important is AirAsia is the first airline in the region to implement fully ticketless travel and unassigned seats.

1. Low-cost airline
AirAsia pioneered low cost travelling in Asia so it is one of the airlines which is based on Low Cost Carrier Terminal (LCCT). The vision of AirAsia is to serve the 3 billion people who are currently underserved with poor connectivity and high fares. Thus, this is one of the secret of success for the AirAsia low fare airline’s company.
2. Perfect online booking system
AirAsia is belonged to Business-to-Customer (B2C) transaction. It is also the first airline to launch the online booking facility that enables bookings through its website. When the online booking facility was launched on 10th May 2002, the airline has recorded over RM5 million sales through the internet (From AirAsia’s Press Release).
3. Multi-language website
AirAsia’s website is available in seven languages which are Bahasa Malaysia, English, Mandarin, Tamil, Thai, Tagalog and Bahasa Indonesia. Therefore, it is proved that around 70 percent of AirAsia’s business comes from Internet booking due to its friendly user website.
4. Convenient web check-in system
In addition, AirAsia introduced the web check-in in 2007. This web check-in has created AirAsia to become the first airline in Malaysia to offer the ability to check in online and print out boarding passes. In the end of 2007, a new service named “Xpress Boarding” had been launched. This new service enables passengers to get priority boarding with minimum fees.
Besides web check in and kiosk check in, AirAsia also introduces PDA check-in. As a result, this service enables the passengers to get a low price and choose seats at ease.
5. High security and reliability online system
Furthermore, AirAsia has expanding rapidly and it is a very popular airline industry nowadays. AirAsia’s online system is performed around the world and customers can book or buy air ticket from Internet. The transaction with AirAsia through Internet is secured because they use a high standard encryption mode to guarantee that customer transaction is secured and saved. Hence, this security system increases the customer’s loyalty through internet.
Based on my opinion, AirAsia.com is a successful E-Commerce website because it is a convenient online booking which ensures a hassle-free and friendly user experience.

In conclusion, I agree that “Now Everyone Can Fly”.

PICK A SEAT

Now you can pick your favorite seat when you fly with us!

~For more information, please refer to following websites

• AirAsia.com
• AirAsia lauches Xpress Boarding
• AirAsia launches AirAsia Vista Gadget
• E-Commerce Review of AirAsia.com
  

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The History and Evolution of E-commerce

Every IT tools has its own development & evolution. Is every single of E-Commerce development process contributing success to E-Commerce? Can E-Commerce reach today’s evolution without passing through its growing process? Well, we are going to tell you how important is the development process of E-Commerce.

E-Commerce has changed over the last 30 years and grows steadily from its past history until now. It was first introduced by Michael Aldrich in 1979 to allow electronic commercial transactions to be done through EDI & EFT.

~The information below shows the trend of E-Commerce:

~1980s	E-Commerce was used extensively by auto manufacturers such as Nissan. Credit cards, automated teller machine (ATM), & airline reservation system were introduced as electronic transactions.
~1984	EDI was standardized by using ASC X12 to enable companies to transfer large amount of transactions with one another reliably.
~1990s	World Wide Web was first written by Tim Berners-Lee. ERP, data mining, & data warehousing were also used to support daily transaction process & keep data into shared databases.
~1992	CompuServe offered online retail products to its customers. Thereafter, the development of Security protocol, DSL, & Mosaic Browser allowing quicker access and connection to E-Commerce.
~1994	Pizza Hut offered pizza ordering on its web page for customers to order pizza grocery through online. Next, Netscape provided users a simple browser to surf Internet & safe online transaction technology.
~1995	Amazon was launched by Jess Bezos to permit its customers purchase books & magazines through online while eBay was created by Pierre Omidyar to allow sales take place in set-time format.
~1998	The growth of E-Commerce continues as Electronic Postal Stamp was created for users to download it for printing from the web.

~ Current Trend:

E-Commerce is heavily relying by consumers as it allows them to purchase various goods through internet by using secure protocols & electronic payment services.

Series of companies such as Air Asia, Amazon, Dell, & Yahoo are also using E-Commerce continuously to promote their products or services to generate revenue.

In our opinion, the overall development process of E-Commerce should be given credit in contributing the success of E-Commerce today. The successful E-Commerce companies like Dell & Amazon will not be able to provide online transaction services to its customers if E-Commerce does not pass through all its growing process.

~For more information, please refer to following websites:

E-Commerce

eBay

History of E-Commerce

E-Commerce as a Revenue Stream: History of E-Commerce

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4th Pilot - Chin Han

Looking at the azure sky, I see a “Boeing 767 airplane” flying in the sky. I wish I can fulfill my dream to travel around the world in one day. Yes! I’m indeed that person…

Hello, everyone! Nice to meet you. This is my first trying to write the web log (blog). Welcome to our blog, E-Commerce Airline.

I am the 4^th pilot. My name is Lee Chin Han. I am coming from Johor Bahru. I am 21 years old for this year and I live in Skudai since I was a child. Currently, I am an Accounting student, Year 3 Trimester 1 in Universiti Tunku Abdul Rahman (UTAR). Regarding to my education background, I was graduated from S.J.K(C) Pu Sze during primary school before going to Foon Yew High School and after that I continue further my studies in UTAR.

My ambition is to become an accountant and I wish I can travel all around the world after my graduation. Besides that, I hope to contribute more to my family by providing them a better life when I come out to work in a commercial world. Moreover, I wish I can create my own business in future.

Besides that, I have several hobbies. These hobbies include watching dramas, travelling, chatting, doing gym, and reading. Having hobbies is very beneficial to me as it can make me feel relaxed and happy. For instance, I like to watch Hong Kong dramas and join some travelling activities during my leisure time. Besides that, when I am free, I like to chat with my friends through MSN and facebook to foster our friendship. Furthermore, I like to go for gym to keep my body fit and healthy. I also read the newspapers everyday in order to enhance my knowledge.

The top 5 websites that I visited the most are ChinaPress, Facebook, WBLE, Hotmail, and HdZone. I am able to know the latest news and information such as politic, economic, technology, entertainment and so on through the related website. Besides Chinapress, I also browse to the website of Nanyang, Sinchew and The Star.

Facebook is a useful website for me because it allows me to obtain the most updated information from my friend. I can play online games, chat with friends, and share some photos or videos with them through Facebook. Besides Facebook, I also have Friendster account. Friendster plays the same roles and functions as Facebook. Sometimes, I also like to spend my time to check my course syllabus and e-mail messages through WBLE and Hotmail websites. Lastly, I always download new songs and exciting movies in Hdzone.

I hope every passenger can enjoy visiting our blog and give us some useful feedback and comments! Let’s start our cheerful flight now. Thank you.

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