Current topics in international business and globalization

Globalization & E-Commerce Standardization or Adaptation

Standardization or Adaptation in E-Commerce Business Models

People often choose to build and operate their businesses via the Internet because they believe it simplifies the process. It is often thought that having an economic relationship with others electronically reduces many of the personal, cultural and even language concerns associated with face-to-face transactions, on both sides of the relationship. Traditional customer service expectations that brick and mortar businesses have to deal with can become very complex when they involve people with very diverse expectations or limited understandings of others. Transactions that occur electronically, often within a website, are thought to minimize these considerations, thus failing to understand the total customer experience (Dawson, et al., 2003).

But the fact is that this is turning out not to be true. Large and small e-commerce companies are finding that they have to make challenging decisions about their total customer experience even online. Should they be standardized to do the same for all customers at all times, or should they be adaptable to various cultural, language or even buying habits, which may themselves be directly related to social or national considerations? Even the largest of telecommunication businesses, that clearly have access to the best of technological capacities, are finding that these issues are quickly rising to the top of their interests (Khalatyan, 2010).

Serious students of e-commerce are now beginning to recognize this concern as are those who have studies the implications in traditional business models. For e-commerce, the considerations may be even broader because of the diversity of models that already predominate. There are five models of key importance, each of which focuses on the nature of the relationship between the transactional partners. Malik (2010) identifies them on a student-oriented site as being business to consumer (B2C), business to business (B2B), consumer to consumer (C2C), peer-to-peer (P2P) or mCommerce (mobile). The first three models are the most common ones for typical purchase or exchange relationships. The peer-to-peer model is mostly about information exchange and focuses on technical connectivity. Mobile commerce is an effort to change the dynamics based on using handheld capacities, which can influence the buying or decision-making process.

Most typical merchandizing transactions are thought to be those involving the B2C or B2B model, even when they involve mCommerce access (Dawson, et al., 2003:946). There is evidence that these models are likely to remain most important in the future for a lot of online commercial activity. This is why new efforts are underway to try to understand the implications of building an operational model within these platforms that is either standardized to cultural and even language expectations, or that is highly flexible to individual or cultural needs and expectations (Sinkovics, et al., 2007). Traditional businesses have studied this concern for some time, and are still trying to determine how to present themselves in the best ways. For digital sites, the issue seems more complex. Adaptive sites have the ability to align their look, feel and overall transactional presentation to highly personalized information associated with the point of origin of the consumer, for example, or buying habits, etc. Monitoring computers now actively search for country codes, IP addresses of origin and other factors and collect that information in regards to individuals and to larger cultural considerations (something the telecoms are becoming big at).

Sinkovics et al. (2007) undertook a study of this domain by way of looking at how various e-commerce models were reflected in German websites that conducted business in several countries. Their findings confirmed that standardization can have clear cost savings and functionality benefits. On the other hand, companies that do business across the global markets find that they have to be much more adaptive to sustain their appeal or to reward customer loyalty. An interesting finding suggests that the more electronically advance a country is the greater the likelihood that standardized sites might work at least initially (Sinkovics, 2007:230). For customers in emerging markets, it appears that greater cultural awareness and sensitivity is most important even in e-commerce sites. The telecom businesses have found this to be the case as well as they have sought to move into new countries where communication capabilities are just beginning to be accepted. As one commentator was noted as saying, while there are global products and global brands, there really are no global people (Sinkovics, 2007:229). One way or another, the e-commerce activities of the future are going to have to factor in sophisticated assessments of whether their customers like to be treated the same or based on very individualized considerations. As of this point, the findings are far from clear though many people are assuming the adaptability will prevail.

The shape of the e-commerce experience is likely to be one of the most critical issues in multinational or global transactions in the future. Even business people who opt for standardized approaches are going to have to deal with the reality of some others (such as telecoms) that are moving toward intensive adaptability. This will likely have all types of implications for small e-commerce competitors and even for brick and mortar businesses that want to use street and online services.