Some prerequisites for electronic commerce

We begin by examining the Internet-based electronic market of books, CD’s, cattle and flowers in an attempt to understand some prerequisites of electronic commerce. Books and CD’s are near ideal goods to be bought via the Internet - their characteristics can be easily captured by electronic information format, they are non-perishable and they can be easily packed and transported. These features are found to be wanting in the case of cattle and flowers, but they are still being successfully traded via the electronic media. Our study suggests the notion of adequate information that is closely intertwined with other pre-requisites for electronic commerce. Our study argues that the following are some of the prerequisites for electronic commerce: (1) ex-ante information that is perceived adequate by the prospective buyers, (2) institutions that provide reliable statement of quality, (3) transport and financial infrastructure, and technological system. As a success story of on-line retailing that is often cited in trade magazines, Amazon has demonstrated its ability to integrate the use of ex-ante information, existing technology, institutions, logistics and infrastructure. However, innovation often reveals possibilities of improvement in the existing socio-technological setup. We consider