SOCIAL NETWORKING AND E-COMMERCE 1

Social network impact on E-Business

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Table of Contents
Introduction ..................................................................................................................................... 3
E-commerce Businesses and Social Media..................................................................................... 3
Definition of the Terms ................................................................................................................... 4
Social Media................................................................................................................................ 4
E-Commerce................................................................................................................................ 5
Theoretical Framework – The Influence of Social Media in Business Organizations ................... 5
Goals of Business Firms Regarding Social Media Usage .............................................................. 9
Effects of Internet on E-commerce ............................................................................................... 10
Positive Effects on a Business ................................................................................................... 10
Negative Effects to a Business .................................................................................................. 12
Impact of Social Media Marketing on E-business Performance .................................................. 13
Utilizing Functionalities of Social Media in E-commerce ........................................................... 13
Trends for 2017 ............................................................................................................................. 15
Conclusion .................................................................................................................................... 17
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Introduction

The recent years have witnessed a revolutionary advancement in the field of

communication technology that makes it possible to transfer the information with more ease and

less time across the entire world. Consequently, the web bases technology impacts almost all the

aspects of human life. The online portals collect the variety of information that is then efficiently

become available to customers in addition to other internet-based services (Makki and Chang,

2015). The Internet acts as a gateway to give access to the number of other online websites and

information basis. In addition to this, Internet acts as central axes and a data source which could

be customized according to the divergent needs of the users. Furthermore, Internet has made the

in-depth information accessibility possible for the users. Thus as more people use the Internet to

get information, the significance of Internet has increased in the lives of online communities

(Makki and Chang, 2015). The Internet also facilitates its commercial users like non-profit and

for-profit business firms in their activities such as management and information broadcasting

tasks, which were previously considered as high time-consuming activities.

E-commerce Businesses and Social Media

Due to recent developments in the field of Electronic Commerce (E-commerce),

customers are now able to make online purchases rather than physically visiting the stores.

Customers could utilize Internet facility to buy products for almost all of their needs. Resultantly,

it changes the overall operations of both service and retail business (AlGhamdi, Nguyen & Jones,

2013). E-commerce facilitates the customers to make online purchases while sitting at their

offices or homes. It also enables the customers to have window-shopping on their smartphones

or on other digital devices and to get information about the manufacturing details of the

company. E-commerce is mostly referred as a process of selling and buying products and
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services through the web-based sites or buying and selling of goods, services, and information

that are exchanged through the information network like the Internet (AlGhamdi, Nguyen &

Jones, 2013).

E-commerce has achieved a high popularity in various informatics circles and also on the

platforms of mass media. Its effects could be easily observed in the fields of financial services

and trading. E-commerce has taken a very less time to be accelerated. Services that played an

important role in the rise of e-commerce include online shares trading, online banking activities;

Internet-based retailing, debit/credit cards, and digital procedure of checking and remote

payment (AlGhamdi, Nguyen & Jones, 2013). Many people are now used to getting help from

the Internet and valuing the Internet for enabling the users to have access to a variety of

information from the entire globe. Users can get access to a huge number of online sites through

just one click and can perform various trading and information exchange activities. Now, the

Internet is not a new phenomenon for many people rather it became a routine thing like TV and

phones. After the first wave of the internet revolution, which brought huge advancement in

people’s lives, the second wave of e-commerce revolution is penetrating in almost all fields of

life. Statistically, the growth of e-commerce is very high as e-commerce has 10 billion dollars

global market in 1997, which was increased at tremendously high levels of 200 to 300 billion

dollars in the year 2002 (AlGhamdi, Nguyen & Jones, 2013).

Definition of the Terms

Social Media

The term social media could be defined as a collection of Internet-based applications that

are established by utilizing the technological and ideological fundamentals of web 2.0 and

through which it is possible to create and interchange the content, generated by the users
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(AlGhamdi, Nguyen, Nguyen, and Drew, 2012). Social media is built on a platform known as

Web 2.0. There are various forms of social media which include; weblogs, social networks,

social blogs, Internet forums, wikis, video, social bookmarking and rating, microblogging,

podcast, and pictures etc. According to some researchers, search engines are also part of social

media by defining them as reputation aggregators because they perform the task of gathering the

websites whose goods and services are of high quality and rank various sites according to their

level of reputation (AlGhamdi, Nguyen, Nguyen and Drew, 2012).

E-Commerce

Investors words define the term e-commerce as an electronic medium through which

customers and business organizations can perform the activities of selling and purchasing of

goods and services without relying on some physical document or place (Delone and Mclean,

2004). It could also be defined as the activity of selling and purchasing of goods conducted on

the Internet. There are three types of e-commerce activities; business to consumer (B2C),

business to business (B2B) and consumer to consumer (C2C).

Theoretical Framework – The Influence of Social Media in Business Organizations

The following figure describes the use of social media in the field of e-commerce

business for the marketing strategy of an organization. As it's given here that there exist 2 kinds

of platforms of social media which e-commerce uses a lot; Facebook and Instagram. Using these

2 kinds of platforms of social media, there is a lot of help about the e-commerce business for

enhancing the marketing (AlGhamdi, Nguyen, Nguyen, and Drew, 2012). With the help of this

marketing strategy, there comes advantages to the firm in different ways like the promotion of

products, increased brand awareness, higher sales, and more traffic on the website of the

business.
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The E-commerce firms also enjoy the advantage of attracting the new customers while

keeping themselves in link with their current customers while using social media platforms for

marketing. Additionally, with the use of social media for marketing, you don’t need to spend any

money. But, offering the product information for the online customers is also helpful for both

customers and firm.

Going on further using the given theoretical framework, many researchers have used the

work of other significant authors for supporting the above-mentioned theoretical model. Firstly,

for continuing this section, the platforms of social media are served as the main tool for

supporting various inter and intra (Baghdadi, 2013).

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Organizational activities amid staff, consumers, people, and other business partners like

collaborative product growth, implementation of the corporate interchange at the economic

institution, the formation of the knowledge sharing societies, collaborative learning as well as

creativity for different marketing strategies to do the brand management. Furthermore, the

growth of social media based on Internet has given people as well as organizations an

opportunity to involve with hundreds rather thousands of people related to the products and those

firms which provide them (Baghdadi, 2013).

The most common method of communication which firms use for communicating with

its targeted audience is the (IMC) integrated marketing communications. In this kind of method,

the attempts of communication for controlling and coordinating various kinds of the promotional

mix like personal selling, publicity, direct marketing, promotion for sales, advertising and most

importantly, public relations (Baghdadi, 2013). IMC is used for these elements in order to

produce the unified customer concentrated message and to achieve, unlike organizational

objectives as a result. Though, the strategies, as well as tools to communicate with the

consumers, have developed significant changes along with the arrival of the sensation known as

the social media.

As per the studies of Kumah in 2017, the advantage of the online business or e-commerce

is to offer the better innovation for transmitting the clothing info about products, promoting and

engaging the customers more than the usual physical stores. The regular fashion info, as well as

updates, have got more help and related to the interests of the online customers. Moreover,

McCormick and Livett stated that the options on the retailer sites of fashion industry could put

great emphasis on the fashion consciousness of online customers. Kirtis and Karahan reported
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that around 70% of the total online customers who use social media, use to gather the info related

to brands or products from platforms of social media (Kumah, 2017).

The social media has helped a lot in developing the marketing strategy for most of the

online business as one easily available and profitable way for promoting the services and

products and to catch the attraction of their customers. This allows users to share and exchange

info too with other users on social media.

With the use of the social media platforms for the retailers particularly, there has been a

competitive benefit because all of the platforms are costless which decreases the financial burden

of the brand while increasing its profit. Because of the reality that the social media sites are free

of cost and are widespread all around the globe, they provide an excellent marketing plan for the

business firms and many firms have developed the competitive strategy to grow their businesses

as it helps in the online channeling or the customers for attracting them all across the world.

Moreover, most of the businesses provide benefit from the social media platforms to do the

brand awareness as well as to increase the reach of the brand (Kumah, 2017).

Instagram is one of the most famous and fastest platforms of the social media found all

around the world has more than 200 million active users. Those who use this kind of social

media platform for making videos and uploading photos either to promote the business use or

personal promotion (Kumah, 2017). It is also used as an important marketing strategy for your

business for your firm as you can upload the outlines of each of your products for the customers

in order to make them see and do advertising of the brands. But, as Saravanakumar and

Suganthalakshmi and Chain store age illustrated in 2012, Facebook and Instagram are the most

widely used platforms of social media all across the world, which allow their users to comment

and share on photos and videos which are posted there (Kumah, 2017). It is also found that there
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are more than 600 million users on Facebook and most of the retailers use this medium to

interact with the potential customers.

Moreover, with the deeper use of the social media, most of the online customers found

the tendency of talking about the purchasing experience through (WOM) word of mouth. During

the process of marketing, WOM is important for business firms as customers share info with one

another while making the strong purchasing decision (Kumah, 2017).

Goals of Business Firms Regarding Social Media Usage

In the recent years, both consumers and business organizations are provided with bundles

of growth opportunities due to the increased advancement of the Internet. Due to the high

popularity of social media in almost all the areas of society, many business organizations have

utilized social media platforms for creating their brand equity and to facilitate their marketing

campaigns. By using social media, business organizations can increase their brand awareness and

scope, can use referrals to enhance communication with their consumers and can easily manage

their trading and reputing activities (Huang and Benyoucef, 2013). In addition to this, the

organizations can also utilize their customers’ intelligence by sharing their knowledge and

specialties, use them for supporting a certain marketing campaign and also using their abilities

for facilitating the other customers’ needs (Huang and Benyoucef, 2013).

Furthermore, by using social media busyness, organizations can perform their brand

endorsement, provide significant information to their customers and can increase the customer

traffic to the organization’s website. By using social media sites, businesses can endorse their

goods and could establish more product/brand consciousness by displaying them on the Internet,

this would ultimately result in the high growth of sales. When more consumers access the

organizations' website, through links on social media, it increases the website traffic and results
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in high online sales for the firm (Laroche, Habibiand Richard, 2013). An example of this could

be Sony and Dell companies that achieved additional 1 million pounds and 3 million dollars in

sales respectively, through promoting their brand on Twitter.

Effects of the Internet on E-commerce

There is no doubt about the high level of significance that the Internet possesses for the e-

commerce activities. Its significance is evident as the Internet provides a network that enables

the users (sellers/purchasers) to perform their trading activities at lower cost, in less time and

with a certain level of privacy without considering the physical or territorial boundaries (Huang

and Benyoucef, 2013). The Internet also facilitates the direct connection between the businesses

and its suppliers and consumers at lower cost by eliminating the several levels of the middleman.

As a result of this, e-commerce facilitates the market expansion for the business and reduces

their trading costs.

Positive Effects on a Business

Internet supports the business organization for its market extension. With the use of the

Internet, even a small size firm could access the markets beyond its locality and also beyond its

existing base of customers. Due to this benefit, the small firms could access the areas which were

previously remained under the scope of big forms thus it creates a level playing field where both

small and large firms will be exposed to fair competitive market (Liang, Ho, Li and Turban,

2011). It is because of the fact that every company, regardless of its size, has to reduce its size to

get fit into the window of consumer’s browser. It is not very costly to establish a website on the

Internet and also its maintenance cost is very nominal.

Businesses can save the huge amount of time and cost by posting different features of

their products online, by updating business information. Through these activities, businesses
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could create their unique positions in the customers' mind and thus could enhance product

awareness in the existing and potential market share. Another significant advantage of

conducting a business through online sources is that it facilitates the creation and maintenance of

a reliable relationship with the business partners and consumers (Liang, Ho, Li and Turban,

2011). The Internet has also increased the rate of responsiveness to the new heights.

Businesses like FedEx, Dell and UPS could be quoted in terms of high responsiveness as

they enable their customers and partners to track the several elements of their transactions by

simply signing up to the firm's website. This connection is customized and is available at cheaper

rates thus enables the businesses to more efficiently responds to the consumers' needs and

demands. The advantage of shared information has been provided by the Internet, which could

be utilized by all the businesses regardless of their size and at very lower cost. Efficiencies could

be improved through easy access to the real-time information and it ultimately increases the

productivity and profit margins. The scope of the information is further widened when it is

broadcasted. Due to real-time competencies and multi-media nature of the Internet, the

relationship building abilities of the businesses are further enhanced (Liang, Ho, Li and Turban,

2011).

High popularity and rate of penetration of Internet provide the firms with huge cost

benefits, as they converted their various activities on the Internet. The Internet has positively

affected a range of business activities including creation of online packages tracking, consumer

service centers and online broker houses. The Internet enables the businesses to digitize their

service/product offerings and also to provide on-demand products and services, which facilitates

the accomplishment of twofold objectives; improved services with the lower cost of support,

service, and products (Kwahk and Ge, 2012).

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All the arguments, presented above, support the notion that internet could be used to

create a competitive advantage for the business by creating a connection with suppliers at lower

costs.

Negative Effects to a Business

In addition to the potential benefits, which the Internet offers to the businesses, there are

also some disadvantages or challenges, to which businesses are exposed when they go for online

business. The information, provided by the Internet, is only reflective of the two out of the five

human senses that are listening and seeing. Thus Internet could not communicate the information

of smell, feel and taste.

In case of online business setup, the market entry cost is very minimal thus the barriers to

the new entrance has lowered. In this way, companies are faced with tough competition that

could ultimately affect their profit margins negatively. It is also argued that the bargaining power

of the businesses has been reduced by the e-commerce as the online firms could not push their

products through price bargain thus it also declines their revenues (Kwahk and Ge, 2012).

Security is another major issue, faced by the firms with online business activities.

Considering an all-open nature of the Internet, it is difficult to maintain the security or privacy

when one also has to maintain the ease and advantages of Internet usage (Kwahk and Ge, 2012).

There are more chances of betrayal, for both sellers and purchasers, in case of transactions

executed on the Internet. Although Internet offers huge cost savings online businesses have to

pay high costs when it comes to network accessibility. The providers of network access can

create their monopoly and it enables them to set and change the premium charges for network

accessibility (Zhao, Li, He, Chang, Wen and Li, 2016).

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Impact of Social Media Marketing on E-business Performance

Using social media sites for generating website traffic and to increase sales of the firm

refers to the process of social media marketing. The campaigns of social media marketing are

focused on designing the material that could easily grasp the customers’ attention and also

convince them to share that material on other social media sites (Zhao, Li, He, Chang, Wen and

Li, 2016). Social media marketing, sometimes also referred as 2nd wave of internet-based

marketing provides the customers with the control of communication and thus further improves

the promotional activities of the firm. Due to its innovativeness and usefulness, marketers may

impulsively adopt the new social media applications into their marketing programs that could

produce high revenues from both of their local and global markets (Zhao, Li, He, Chang, Wen

and Li, 2016). Social media enables an individual to initiate communication with thousands of

other people about the services and products of the organization.

Utilizing Functionalities of Social Media in E-commerce

Posting on Daily Basis

To begin and develop your social network, you have to post fascinating and connecting

with content reliably. Study what the best posting frequency is, the means by which your group

of onlookers responds to changed sorts of posts, what time is the best to post, and so forth

Be Short and Concise

Individuals have less and less time, so data over-burden isn't an ideal method to connect

with clients. Give them short and just applicable data about the item that could intrigue them.

Simple and quick utilization is a win-win circumstance. Likewise, include great visual substance.

One post that incorporates picture or video will create half a greater number of preferences than

one without (Zhao, Li, He, Chang, Wen and Li, 2016).
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Set Your Goals

Consider what you are intending to accomplish by utilizing web-based life. Brand

acknowledgment? Directing people to your site? Expanding deals? Make your objectives

measurable, so you can track advance and measure how proficient informal organizations are for

your business. Track Internet-based life's activity number to your site, number of preferences,

shares, remarks, and so forth (Zhao, Li, He, Chang, Wen and Li, 2016).

Use Benefits of Different Social Networks

You are available on informal communities, yet there is no impact? Take a stab at

utilizing all the particular highlights that different informal communities bring. Utilize hashtags,

exploit Facebook Sign Up catch, influence a Facebook to challenge, include buyable Pinterest

pins and comparable (Gladwell and Shirky, 2011). Social online business implies always

following patterns. There are such a significant number of points of interest that can enable you

to out to make your business more unmistakable

User Reviews

Individuals will probably buy an item if somebody before them utilized and assessed it.

Request that clients leave their audit about items and show it on your Facebook page, for

instance. These surveys will make the social movement for your page and thusly increment

deals.

User-Generated Content

Client produced content is convincing on the grounds that it gives potential clients social

confirmation they look for. For social online business, client produced content is a brilliant mine.

Individuals love to see content that other individuals have made, they perceive themselves in it.
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Approach your customers for remarks, photographs, and recordings and post it to begin

discourses (Gladwell and Shirky, 2011).

Know Your Customers

In the event that you don't have a clue about your clients, you cannot post content that

will intrigue and draw in them. Become acquainted with them through a few polls, studies or

web-based life so you could actualize proficient procedure in like manner (Gladwell and Shirky,

2011). Your posts should handle their requirements – discover what they are.

Don’t Just Try to Sell

In any case, the essential objective of utilizing interpersonal organizations isn't to make a

buy. Individuals utilize interpersonal organizations due to interest and social touch. Along these

lines, regarding that. Try not to be dynamic just when you are attempting to offer something.

Individuals will turn off and unfollow if you do that.

Trends for 2017

Real-Time and Private Communication

Albeit informal organizations are spots to share things openly, they are winding up

progressively private. Numerous clients lean toward private informing or correspondence in shut

gatherings rather than open telecom. Retailers should ensure that the correspondence to potential

clients is wonderful and agreeable (Kumah, 2017). Ongoing association with the gathering of

people is an essential pattern since individuals detest sitting tight days for an answer on an email.

Regardless of whether you have staff individuals who are accessible on talk or utilizing a live

visit bot, the outcome will be a fulfilled client and a possibility at change. In social web-based

business, liquid correspondence is pivotal (Kumah, 2017).

In-App Purchasing
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Today, Internet business is spreading increasingly on interpersonal organizations,

essentially in light of the fact that a high level of individuals is investing energy there. Buying by

means of versatile applications is a general event, and that pattern will continue developing in

2017. Some informal organizations (Facebook, Instagram, Pinterest, and Twitter) actualized the

choice to buy items specifically through their portable applications (Kumah, 2017). What's more,

individuals utilize that open door since they trust those informal communities; continually

returning to them with the expectation that they will discover potential buys.

Paid Advertising

An ever-increasing number of retailers perceive the esteem and significance of utilizing

online networking in web-based business, so the market has turned into significantly all the more

contending. Accomplishing only natural outcomes is hard in light of the fact that individuals will

dependably observe posts first from their companions, not from organizations and brands.

Sooner or later, you discover that you have to put resources into promoting and pay to get your

business seen. Since an ever-increasing number of organizations began utilizing paid promoting,

the costs for ad started to gradually rise, as well (Kumah, 2017).

Live Video

In social web-based business, it is the most ideal approach to emerge, without a doubt.

Video catches your eye while perusing; its substance connects with you. In any case, since of a

year ago, a portion of the informal communities discharged a live video alternative. With this

component, you can live stream up to 4 hours. This component can make mark awareness and

construct a network rapidly and effectively. It can be utilized as a part of numerous fascinating

and inventive courses – in live Q&A, the item showing or off camera see (Kumah, 2017). Due to

these advantages, numerous retailers are utilizing or wanting to utilize it this year.
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Virtual Reality

The part that will have virtual and expanded reality in online business is colossal. VR

offers an essential shopping knowledge, and that is the reason it accomplishes a major number of

offers. Brands are quick in perceiving this pattern.

Increasing Friends and Followers

Expanding the number of individuals following a page or web-based life account must be

a need. The more individuals that see posts, the more successful they are. Offering content that is

valuable, energizing or the two grows a devotee base, as individuals share posts that they find

locks in. Periodically requesting that present adherents share substance can likewise help, as long

as the solicitations aren't excessively visited or pushy. Offering present and potential clients a

motivation to take after your records is another helpful system, and one that is effortlessly put

into impact with the correct apparatuses.

Conclusion

Many researchers have explained that in today’s time all e-commerce companies make

their accounts on the social media and this is the most important part of their marketing strategy.

Instagram has gained a very much popularity regarding e-commerce business and it is one of the

simplest methods to advertise your business. All e-commerce companies are using Instagram for

their e-commerce business. Only Instagram is not a platform but Facebook, and many other

social networking sites are using for marketing purpose. But the Instagram and Facebook are two

such platforms which millions of people around the globe are using. In 2010, Instagram was

introduced and it becomes famous when people are allowed to display services and products of

the company and it becomes a way of doing online businesses. Such businesses are done when

people share videos and pictures with the customers and then attract them.
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The fame and popularity of the social websites are mentioned in magazines, newspapers,

media etc. and it shows the strength and success of especially Facebook and Instagram. Some e-

commerce companies are using Instagram as a part of their marketing strategy for the last 3 years

and numbers of Instagram users are increasing day by day. There are some companies which are

using Instagram from the last 5 years as the part of marketing strategy.

After the study of e-companies and social media, there are few reasons come in front of

us that why companies are using social networking websites for marketing strategy. Social

networking sites have millions of users and this number is increasing day by day so by

introducing or displaying your product’s picture or video you can target a huge community and

attract new people and it is also the best way to communicate to existing customers.

The most important factor that how much social media is important for their businesses.

But many e-commerce companies said that traditional marketing is most useful but they cannot

neglect the importance of social media and it is a marketing tool that they utilize in their

marketing strategies. The main purpose of the e-commerce companies is to advertise their

products, services by sharing pictures and videos and also to promote the business.

The main reason for using social media marketing that why companies are using it and

the answer is companies make direct links with their customers due to which communication

becomes easy. Besides this when you talk about cost then many e-commerce companies said

that it is free of cost. When you open an account on the social media and advertise the

company’s products or services then such businesses get the opportunity to reduce their

marketing cost. This is the reason that companies use the social media as a marketing tool. As

the success of social media is increasing with every coming day nobody can deny its importance

and every businessman accept it.

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With the help of social media customers always remain updated about the latest trends

and it helped the businessmen to bring creative things for their customers’. In this present time

customers have left old and traditional ways of advertisement now they are switched towards

social media and digital marketing but again for some e-commerce company’s TV commercials

are the best way of advertisement as compare to social media so such companies cannot get

much benefit from social media platforms.

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