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Benefits of Social Commerce

Question:

Discuss About The Perceived Affect Relationship Of Switching?

The advance in social media application development caused the new paradigm of e-commerce represented in the social commerce. Social media applications facilitate on-line shopping activities of products and services. Business organizations have to develop their websites on social media, according to consumer preferences to facilitate their transaction in the social context. Social commerce brings e-commerce to the social media context and the social media at the same time could be transferred to the e-commerce website. Although social commerce mainly refers to practicing e-commerce activities within the social media context. Social commerce is mainly dedicated to the social activities as collaboration, information sharing and networking (Huang & Benyoucef, 2015).

The social interaction of users is due to the wide spread of the social networking sites. Consumers are free to join the social groups of their choice, communicate, share information, knowledge and practices with each other. This social interaction influences the buying behavior of users according to the perceived information from their friends. The social commerce empowered buyers over the sellers. The social support is likely to increase the social commerce activities and influence more buyers, as users make informed contributions among social groups. These interactions are analyzed by business organizations to know the buyers' attitudes and predict their future activities (Hajli & Sims, 2015).

This report mainly focuses on the opportunities and challenges of the social electronic commerce. It consists of three parts, the first part discusses the possible opportunities of social electronic commerce, the second part analyses the possible problems of social electronic commerce. The third part introduces strategies to reduce risks in social commerce.

The increasing number of social media applications created many opportunities for organizations to developed business models based on the concept of electronic commerce (e-commerce). Social commerce provides a marketplace for users to sell their products on line. Many companies use the social commerce as, Yahoo, eBay and Amazon, as they got the opportunity of user participation to create value from the social networks. The social commerce provides a user centered environment, which creates social interaction as it motivates the users to shop together, which create advantage to the seller represented in increased sales volume, higher level of user engagement and creates strong relations between the organization and the customer
(Huang & Benyoucef, 2015).

Social commerce encourages organizations to provide high quality products, increase the effectiveness of their advertising campaigns and analyze users'preferences to predict the future trends of the market. The social media changed both of the consumer and the companies' roles as the electronic word of mouth marketing has developed. As the word of mouth marketing changed the way the consumers behave is also changed (Jim, et al., 2015).

Challenges of Social Commerce

The key to successful social commerce is the social influence of the customers. As the social support from other encourages the user influence to the product. This influence is the driver of the customer decision of buying the product (Wanga & Yu, 2017).

As a social marketplace, social media encourage users to share information and experiences about shopping products which affects the decisions of their peers.Information sharing between consumers on social media takes place before and after shopping online. It can take the form of rating recommendation or review of the seller or the product. There are a variety of activities that could take place in the social media marketplace as pre-shopping activities, the decision making of shopping and evaluation after-shopping. Accordingly organizations can benefit from these activities in creating their business strategies to improve their performance (Lin, et al., 2017).

Shopping by nature is considered a social activity. The social commerce provides escrow services and accepts guarantees transactions done with the credit card. Social media channel strengths the social nature of the shopping activities in the online shopping activity. It also allows the organizations to take the initiative of the social interaction and to manage the interaction with the customers.Social commerce focuses on the social activities as collaboration and information sharing, unlike the e-commerce, which mainly focuses on the shopping activities.When buyers access the products from social media applications, they can get the information they need from other shoppers' experiences and they gain more knowledge about the purpose of the purpose of their shopping and to make accurate purchasing decision (Lu, et al., 2016).

The information resources available on the social media, when the consumer interacts with one of its applications he can get the information needed to make the buying decision. The type of information the consumers' access to gain knowledge enables the seller to differentiate between the beginner and the expert consumer. Analytics tools can provide the organizations with the type of consumers and their preferences (Barrutia, et al., 2016).

The on-line shopping through social media is different from the shopping experience in the offline context. The social commerce provides buyers with informational and emotional support. But in the online context, people do not have human interaction. The technology of social commerce is represented in applications and web 2.0 technologies which influence consumers to participate in blogs, communities and forums. The variety of technological platforms attracts different styles of users, which creates an opportunity for business organizations to choose their target customers (Hajli, 2013).

  • Factors that influence consumer intention in social commerce and creates opportunities for the business organization

Strategies to Reduce Risks in Social Commerce

According toAkman & Mishra (2017), the consumer driving factors towards social commerce are as follows:

  • Using social commerce involves security aspects, as consumers need to feel that their transactions are secure. Securing the user access increases the opportunity for shopping and risk reduction.
  • Quality also plays a vital role in making shopping decisions. Trust in the product quality creates reliability.
  • It is important to provide an easy access and make the shopping process enjoying to the shoppers in order to attract them. The easiness and enjoyment assist in the user engagement in the technology mechanism.
  • The social pressure affects the consumers in a positive way when they find support from trusted people within the social network and accordingly, the opportunity of their engagement increases.
  • It is important to shoppers to be satisfied when using the information and communication technology. As social network is the platform, where communication takes place between users and it should be developed on a regular basis to attract users. Also, users should be involved in the development process to ensure that the application satisfies their needs. Satisfaction involves easiness, usefulness, expectations and experiences.
  • Small companies can make use of advanced technology in promoting their products to be able to compete globally and take the opportunity that the social commerce offers to them. They should adopt strategies to promote their brands through social networks.
  • It is important for business organizations to be ethical in their presence on the social network as the perceived ethics affect the shoppers' response and enables better sharing of information among users.

It is a challenging task for business organizations to make their social platform socially accepted. Organizations have to add features to fulfil the user needs. These features include the logo of the brand, recommended products, reviews and feedback, customized products and discounts. It is important for business organizations to understand the market needs and consumer expectations. The social commerce website of the seller should be evaluated according to users' perspectives of the required social features. The absence of this analysis will lead to the failure of the business strategy of social commerce as it should be based on actual, quality and timely information (Huang & Benyoucef, 2015).

  • Trust in social commerce:

Almost all of the economic transactions are built on trust. The social commerce platform lacks the rules so users tend to trust the seller when taking the shopping decision. Trust is also the most important factor in e-commerce. The social context can be a source of providing trust or the opposite. In social commerce, trust in the seller is the major aspect then comes the trust in the marketplace.The buyer interaction through the website should create a trust, analysts describe this relationship as similar to the interpersonal interaction. Being able to view the previous purchase actions of buyers, directs the behavior of the buyers according to the perceived information (Lu, et al., 2016). It is important to reduce the perceived risk of the buyers through monitoring their purchasing performance indicators in different modes of transactions (Zheng, et al., 2015).

  • Members’ intention in social commerce

The shared intention among group members reflects the individual intention of the group members. It is considered a collective intention of the entire group. That is why it is considered a social value which influences the group members' behaviors.It is also considered informational value asinteraction among group members includes information sharing, which impact their attitudes and buying behavior (Sun, et al., 2016).

  • Risk of social commerce

There are different types of risks that could take place in the social commerce, including, product, channel and social related risk. The product-related risk, concerns with whether the product specifications meet the consumer expectations or fail to do this.  The channel-related risk concerns with the consumer's feeling towards the online buying process, which could be positive or negative.The social-related risk concerns with the buyer attitude with regard to the opinion of his family members or friends.Accordingly, new consumers or pad experienced consumers have high perceived risk towards the social commerce. On the opposite, when the consumer is loyal, his perceived risk is low and the switching cost will be positive(Yen, 2010).

  • Security of social commerce

The vendor behavior should be security related. Securing personal and financial information is a very important issue. Security actions include, privacy control, confidentiality control, authentication control and data integrity control. The user perceived security controls his buying behavior. If the users feel safe and their personal information is protected, then confident expectation will be gained.The perceived security is highly related to trust, as the received security increases the trust increases (Choi & Nazareth, 2014).

  • Electronic word of mouth

The credibility of information is important to the electronic word of mouth in the online context. If the users trust the social commerce website, it is more likely for them to spread electronic word of mouth about the company activities. High level of interaction on the social website, creates an opportunity to the electronic word of mouth behavior to spread(Shi & Chow, 2015).

  • Culture in social commerce

The social media marketplace makes it easy to define the various communities and cultures. It provides a challenge to the sellers to satisfy the individuals' needs according to their culture and privacy protection. Individuals' culture may be related to high perceived risk towards financial transaction security or personal information protection through the shopping transaction process. Also, it is important for sellers to differentiate between public and private users in the online context (Gajendra & Wang, 2014).

  • Social media and brand engagement

Brand engagement in social commerce is considered an effective tool for business organizations to spread worldwide. The challenge exists in the fact that social media were created to people not to spread brands. Brands are mainly speeded by electronic word of mouth. The problem is the brand engagement has no measurement either inside the organization or in the social media platform. Accordingly, it is better to organizations try to understand how brand engagement happens and attract more users to the brand. Many forms of engagement do exist, as photo sharing, blogs, videos, chat rooms and forums (Schultz & Peltier, 2013).

Organizations should be aware that social commerce is challenging to them, as problems may occur and spread widely among users worldwide. There should be a strategy to deal with such cases of crisis to deal with them and reduces their impact. The problem may occur due to information insecurity; in this case, technical handling is necessary at the time of occurrence.  It is also considered a responsibility of the consumer to protect his information in the online context; this could be done by using the latest security software and safe browsers while making online transactions (Vos, et al., 2014).

The corporate social responsibility (CSR) plays a role in improving business organizations' social commitment, including, their presence in the inline context. CSR assists in keeping the ethical standards of the organizations (Farrokhnia & Keith, 2013).

Social commerce provides a marketplace for users to sell their products on line.The social commerce provides a user centered environment, which creates social interaction as it motivates the users to shop together. It also, encourages organizations to provide high quality products and increase the effectiveness of their advertising campaigns.

Accordingly, this chapter intends to give an insight into the research approach, research tools and technique as well as research philosophy that will guide the systematic process of collecting and analysing the research data.

Research philosophy is an important concept as it explains the set of beliefs underlying the research approach. While there are three distinct kinds of research philosophy- Positivism, Interpretivism and Realism, the present research project will employ the use of Interpretivism.  This research philosophy has been chosen here because the ulterior aim of the research is to not merely to test the validity of any hypothesis, but to develop knowledge and gain insight into the research issue. The Interpretivism approach will help in gaining an empathetic understanding and in-depth analysis of possible advantages and potential risks of utilizing social e-commerce in business (Mackey and Gass 2015). In order to understand the opportunities and risks of outsourcing business activities, it is important to see the situation and interpret the issue through the minds of the managers of social e-commerce using organizations.

The research approach is also an integral part of any research method, and it helps in offering an insight into the basic plans and procedures which are being used in the research process.  There are primarily two different kinds of research approach which are – Inductive Research Approach and Deductive research Approach. While the deductive research approach intends to test the validity of a theory, the inductive approach is concerned with the exploration of new facts and generation of new ideas (Taylor et al. 2015). Since this research does not intent to test the validity of any hypothesis, but rather simply intends to develop knowledge about the possible risks and opportunities of social e-commerce in business, inductive approach will be chosen. The inductive method will help in developing a pattern of meaning and exploring the important facts regarding the prospects and scope of application of the social e-commerce system in business.

The data collection method is the most important method in the research process, as it helps in selecting the appropriate method of collecting research information that will be analysed for deriving reliable conclusion. There are two kinds of data collection methods- qualitative data collection method and quantitative data collection method. The qualitative data collection method will be adopted for the present research, because the present research intends to uncover and explore the research topic in greater depth, and hence a more holistic understanding of the research issue is important (Flick 2015). Quantitative data collection method has been omitted here because statistical data will have no role to play here. The qualitative method will be chosen because it will help in developing an understanding of the behaviour and attitudes of the consumers, and how the same is affected by the availability of products on the social networking sites. Any kind of factual and statistical data is not required here. Hence, accordingly the data will be collected by conducting a review of the existent academic literature as well as by arranging a qualitative focus group interview with the managers of a chosen organization- SnapCap that also uses the social e-commerce platform to promote its products and attract consumer attention (Brinkmann 2014).

It is important to note in this connection that there are two kinds of data that can be used in any research- the first hand data, collected by the researcher, also known as the primary data, and the second-hand data collected by other researchers and scholars in the past, that can be utilized for the present study, and is known as the secondary data. The present research employs the use of both primary as well as secondary data (Silverman 2016). Primary data will be used while collecting the data directly from the responses of the interviewees, the managers of SnapCap, while the secondary data will be collected, while reviewing the existent past research papers, academic journal publications, and business reports of companies like Yahoo and Amazon that actively exploit this social platform.

The sampling technique is highly important in the process of conducting a research as it helps in the effective selection of suitable study participants, so that the data collected through the responses of the interviewees, can ensure validity of the findings. Since focus group interview has been selected as a data collection method, the purposeful sampling technique will be used for the research. This technique is widely used in the qualitative research methods, which involves the identification and selection of the respondents, who are likely to possess maximum knowledge and experience about a particular phenomenon (Panneerselvam 2014). Accordingly, the respondents chosen for this research are the managers of SnapCap, an emerging Australian online retail company that utilizes social media for the promotion of its products. The managers will have adequate knowledge regarding the possible opportunities and potential risks of using social networking sites in the context of e-commerce transactions. Accordingly, the sample number chosen is 10.

The qualitative data collected through review of the articles will be analysed by the interpretation of the research information available in order to understand any underlying patterns and common trends (Blumberg et al. 2014). For analysing the data collected through the interview, the conceptualization technique will be followed whereby the general and abstract data will be collected from the research, and the same will be used to explain how they help to explain the specific phenomenon under study.

Reliability and validity are two important issues in any research. Qualitative research is often criticized for lacking the scientific rigours that makes the research authentic and reliable. In order to keep the conclusion error-free and reliable, the present research will confirm the data collected through the review of academic literature, by comparing the results and findings with the responses of the interviewees selected for the interview. Further, to reduce and eliminate research bias, the researcher will engage with other researchers as well.

Although the research will be taken with much care, yet it may not be free from a few limitations. Accordingly, the first limitation of this research is that it is completely reliant on the use of qualitative data, and does not employ the use of quantitiave data, that can reduce the reliability and authenticity of the findings less reliable. Next, the sample size is too small (10), and hence it cannot be ensured that this small sample size will be able to represent the perspectives of the entire target population. Next, the interview questions may be formulated such that it leads to biased and influenced responses from the respondents’ ends.

The entire research process is divided into various research activities that will be accomplished over a period of fourteen weeks. Accordingly, a Gantt chart has been provided below that will give an insight into the research activities and the estimated time to be taken in order to complete the same.

Research Activity

Week 0 to 2

Week 3 to 6

Week 7 to 8

Week 9 to 10

Week 14

Literature Review

Conduction of Interview

Data Analysis

Deriving the Conclusion and Checking the Reliability of the Project Findings

Completion of the Project

Conclusion

It is clearly evident from the above discussion that this chapter offers a detailed idea about the research methodology that will be used in order to conduct this study. With every points and sub points it has been shown with proper justification why the researcher has used that particular methodology.

Reference

Akman, I & Mishra, A 2017, 'Factors influencing consumer intention in social commerce adoption', Information Technology & People, 30(2), pp. 356-370.

Barrutia, J, Paredes, M & Echebarria, C 2016, 'Value co-creation in e-commerce contexts: does product type matter?', European Journal of Marketing, 50(3), pp. 442-463.

Blumberg, B.F., Cooper, D.R. and Schindler, P.S., 2014. Business research methods. McGraw-hill education.

Brinkmann, S., 2014. Interview. In Encyclopedia of Critical Psychology (pp. 1008-1010). Springer New York.

Choi, J & Nazareth, D 2014 'Repairing trust in an e-commerce and security context: an agentbased based modeling approach', Information Management & Computer Security, 22(5), pp. 490-512.

Farrokhnia, F & Keith, C 2013, The accountability challenge to global e-commerce: The need to overcome the developed-developing country divide in WTO e-commerce policies. In: Principles and strategies to balance ethical, social and environmental concerns with corporate requirements. Emerald Group Publishing Limited, pp. 161-181.

Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research project. Sage.

Gajendra, S & Wang, L 2014, 'Ethical perspectives on e-commerce: an empirical investigation', Internet Research, 24(4), pp. 414-435.

Hajli, M 2013, 'A research framework for social commerce adoption', Information Management & Computer Security, 21(3), pp. 144-154.

Hajli, N & Sims, J 2015, Social commerce: The transfer of power from sellers to buyers', Technological Forecasting & Social Change, Vol. 94, p. 350–358.

Huang, Z & Benyoucef, M 2015,'User preferences of social features on social commerce User preferences of social features on social commerce',Technological Forecasting & Social Change, Vol. 95, p. 57–72.

Jim, y, Shen, J & Chang, C 2015, 'Electronic service quality of Facebook social commerce and collaborative learning',Computers in Human Behavior, Vol. 51, p. 1395–1402.

Lin, X, Li, Y& Wang, X 2017,'Social commerce research: Definition, research themes and the trends',International Journal of Information Management, Vol. 37, p. 190–201.

Lu, B, Fan, W & Zhou, M 2016,'Social presence, trust, and social commerce purchase intention: An empirical research',Computers in Human Behavior, Vol. 56, pp. 225-237.

Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and design. Routledge.

Panneerselvam, R., 2014. Research methodology. PHI Learning Pvt. Ltd..

Schultz, D & Peltier, J 2013,'Social media's slippery slope: challenges, opportunities and future research directions',Journal of Research in Interactive Marketing, 7(2), pp. 86-99.

Shi, S & Chow, W 2015,'Trust development and transfer in social commerce: prior experience as moderator',Industrial Management & Data Systems, 115(7), pp. 1182-1203.

Silverman, D. ed., 2016. Qualitative research. Sage.

Sun, Y, Kee, K, Fan, C, Lu, Y, Gupta, S  2016,'Does social climate matter? On friendship groups in social commerce',Electronic Commerce Research and Applications, Volume 18, p. 37–47.

Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

Vos, A, Marinagi, C, Trivellas, P, Eberhagen, N, Giannakopoulos, G, Skourlas, C 2014,'Electronic service quality in online shopping and risk reduction strategies',Journal of Systems and Information Technology, 16(3), pp. 170-186.

Wanga, Y & Yu, C 2017,'Social interaction-based consumer decision-making model in social Commerce: The role of word of mouth and observational learning',International Journal of Information Management, Volume 37, p. 179–189.

Yen, Y 2010,'Can perceived risks affect the relationship of switching costs and customer loyalty in e?commerce?',Internet Research, 20(2), pp. 210-224.

Zheng, H, Hung, J, Lin, Z & Wu, J 2015,'The value of guarantee in service e-commerce',Nankai Business Review International, 6(1), pp. 82-102.

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