Article Review: Electronic Commerce Essay

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The World Wide Web(WWW)has been providing extensive opportunities for merchants to conduct their businesses online. Electronic commerce is a new form of online exchange in which most transactions occur among parties that have never met. As in traditional exchanges, concerns about trust have been identified as a barrier to customer for engaging in e-commerce and a barrier for the success of electronic commerce. In the traditional market, a typical customer would be limited to choosing from a few local retailers. In the age of the internet, one can choose from a verity of online retailers located anywhere in the world, leading to breakdown of borders. A physical separation between the buyer and the seller,…show more content…
The different types of uncertainty or risk in online commerce are relevant for the understanding of trust . This is the context for Nena Lim(2003), Consumers' perceived risk: sources versus consequences. Lim(2003) claims that, consumers are vulnerable and they are likely to expose themselves to loss. According to Lim, In the context of online commerce, risk can be divided into two main types—behavioral risk and environmental risk. Behavioral risk is caused by the actors involved in the transaction. For example, online retailers who have a chance to behave in opportunistic way by taking advantage of the distance and impersonal nature of e- commerce. It includes product risks, psychological risks, and retailer performance risks. Environmental risk is caused by the unpredictable and complex nature of the Internet as transaction medium, which is beyond the control of online retailers and consumers. It includes financial risks and privacy risks. Lim states that, Buying on the Internet presents numerous risks for consumers and the transaction process itself is perceived as risky. She specifies nine risk-dimensions specific to internet shopping that have been found from four different risks sources. The product itself poses a performance risk which is the disappointment that the product does not perform as well as the
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