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Posted on June 16th, 2012, by

Nowadays, e-commerce is rapidly progressing and it is considered to be one of the most perspective fields of the development of business in the contemporary economy. At the same time, often it is argued that the development of e-commerce is unjust and does not provide companies operating in this field with equal opportunities. However, in actuality, e-commerce is consistently more liberal and democratic and, therefore, open to free competition regardless the size of a company, though it is necessary to admit the fact that large companies can benefit from the popularity of its brand and the public approval they have already gained working in traditional markets.

First of all, it should be said that e-commerce has emerged since the late 1990s when the dot-boom marked the rapid development of new technologies and virtualization of commerce through the wider use of Internet and new IT. At the same time, it should be said that the late 1990s were the period when small and unknown companies grew into giants which market value outweighed the market value of companies operating in conventional markets, without entering e-commerce. For instance, it is possible to name such company as Google, which market values is several times larger than the market value of such a large company as GM.

In such a way, it is possible to estimate that e-commerce and e-business became very lucrative, at least at the early stages of its development and small companies could compete effectively with large multinational corporations.

However, in this regard, it is necessary to underline the fact that in the course of time the situation has started to change. At the beginning, e-commerce was not very popular or, to put it more precisely, it was not widely spread because technologies of early and mid-1990s could not provide customers with all the services as they can provide now. In fact, technologically, e-commerce was possible but its services were not widely available to many customers.

This is why e-commerce was not considered by large companies as perspective.

Consequently, small companies could benefit from the lack of attention from the part of large companies and develop their own business. Gradually, as e-commerce progressed larger companies started to enter e-business and competition has increased. But still, small companies are not in the absolutely disadvantageous position since e-commerce often provides small companies with ample opportunities to enter free segments of markets through the introduction of some new service or products that put such companies in leading positions in their segment of the market. In such a situation, even a large company that has a popular brand will face serious difficulties in entering the segment of markets when small company or companies operate because customers have already got a positive experience of using services or buying products of the small companies. As a result, customers are simply unwilling to shift to a larger company simply because of its brand, while they cannot be absolutely sure that the large company that is successful in a conventional market will be equally successful in e-commerce because it is a technologically complicated field.

Thus, it is possible to conclude that e-commerce still provides small companies with opportunities to compete effectively with large companies because e-commerce is relatively new and markets are more open to enter than conventional markets. On the other hand, the position of larger companies grows stronger as e-commerce progresses and in the future e-commerce will resemble conventional commerce where large companies dominate.

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