Research shows that usually 68-80% of E-commerce business fails within the initial five years of their existence. That means it is really hard to survive in the e-commerce field.E-mall is a type of E-commerce model. According to Turner (2008, p. 47) E-mall is an online shopping center where many online stores are located. When the E-mall first came out, it attempted to emulate the concept of the physical mall.
This concept failed due to the fact that distance, which may be a barrier in the physical world, does not exist in the cyber world where other E-shops are just a click away. This added with the increased user sophistication and demand to handle a variety of seller-buyer user interfaces provided by the many different forms of E-shops have caused many of the firsts E-malls to fail.
An example in Malaysia would be Planet Asia. It was the first E-mall in our country. There were a variety of E-shops in Planet Asia, selling a wide range of products from flowers to books.
Planet Asia failed after a year of extensive marketing and investment but more likely due to other factors. Basically E-commerce in developing countries such as Malaysia faces a number of challenges.
The reasons for the failure of Planet Asia are because of the following reasons:-
- Lack of telecommunications infrastructure:
This includes:
- poor Internet connectivity
- lack of fixed telephone lines for end user dial-up access
- the underdeveloped state of Internet Service Providers
- lack of skills among consumers needed in order to use the internet
- Distrust :
Distrust of what businesses do with personal and credit card information is an E-commerce issue in any country, but in countries where there may be good justification for such distrust, it could become a serious obstacle to E-commerce growth.
- Cultural barriers:
Cultural barriers in some countries may also exist to deter the acceptance of e-commerce as a way of doing business. Shopping is a social activity and personal face-to-face contacts with sellers is an important part of the shopping experience.
- Lack of developed legal and regulatory systems:
This would inhibit the development of e-commerce in developing countries.
E-commerce will be ends up with bankruptcy when they fail to become efficient and provide value. However, according to Rovenpor,2003, the E-commerce failure rate is declining sharply. Technological limitations are easier to solve as they require more money and more time. Non-technological limitations are more difficult to solve as they involve changing human perception and thinking. The failure of the first E-mall in Malaysia is mostly contributed by the the non-technological limitations.
~By SieW YinG~
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6 comments:
Ya..I agree that the failure is due to the perception of Malaysians on online purchase.Me myself will not buy online.Hehe!
After read you blog i only notice that there was an E-mall exist in Malaysia.Haha!I tought that this kind of Dot-com companies are only existing at oversea.
Hi, Jin Min. Thanks for ur precious comment!
Ya, you are absolutely right! Most of the failure of Dot-com companies in Malaysia is contributed by the perception and mindset of Malaysians towards e-commerce.
However we can see that the trend of e-commerse in Malaysia is getting better in dis few years. There are quite a number of e-commerce success in Malaysia. Perhaps you may try to purchase online next time! *_^
Yaya, the E-mall that we mentioned in our blog was existing in Malaysia. But the ideal was failed due to the 'mindset' of Malaysians.
Actually nowadays there are a few E-Malls in our country.For example,
the Cyber Mall introduced by Maybank.If you are interested, kindly visit this URL for more information.
http://mall.maybank2u.net/main.jsp?pageid=home
Lastly, thanks for your effort for dropping us your commments~
Haha, no offends to kan ni, you really don't know there is E-mall in Malaysia> i thought i din use e-banking already very outdated, lecture and classmates laught at me but seem like someone is even 'out' than me, haha;D
Dear my group member,
That is your problem for not having an e-banking account since you are an e-commerce student and our university also encourages us for using e-banking to pay our student bill.haha...
Actually there are lots of people who don't know about the e-mall concepts because the concept not so popular as compared to other e-commerce business types in malaysia.
The purpose for us to set up this e-commerce is not solely to fulfil the reqirement of our coursework but also to provide sufficient information for our readers especially for those who are not exposed to the e-commerce.
p.s.: please show respectation to our readers. ^_^
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