E-Consumerism- Problems And Perspectives

The digital marvel of a world we live in has brought us closer in ways never imagined before. Communication, trade, travel, shopping, and almost close to everything now has a digital presence and is very easily accessible. It is relatively easier to be friends with someone in Tokyo, buy music albums from South Korea, invest in shares in the US, book an accommodation in an entirely different country, you name it, and it is all on the internet. It is fascinating to see how compact the world has become, and we can only imagine how much better this could get in the coming years. 

Although taking baby steps into e-commerce, the change is humongous, but so are the hassles attached to it. This article aims at pin-pointing the difficulties involved in e-consumerism. 

Introduction

Consumerism, in physical commerce, is encouragement of spending by people or increased consumption of goods and services. And fundamentally, it helps in uplifting the economy with increased spending while raising the standard of living. Most countries in the world are capitalist economies. The deep-rooted capitalism sure does encourage a lavish spending lifestyle and a more materialistic way of living, but it often comes at a price. Individuals are forced to adapt to a spending centric lifestyle in order to fall in place with the institutionalised capitalism. This in turn, is a big win for large companies and industries, raising their profits. 

It is not caught in the bounds of shopping itself; e-commerce also includes banking transactions- including the usage of debit and credit cards, buying shares, government transactions, paying bills over the internet, all falls within the pool of e-commerce. With the commercialisation of the internet in the 1990s, the electronic transactions were nudged to better heights. The past decade has proven to accommodate e-commerce as a primary channel for trade. 

E-consumerism is nothing but the concept of consumerism that uses the internet as its primary medium. E-commerce is completely dependent on e-consumerism. E-commerce is one of the primary and vast sources of international trade due to its ease in access creating borderless economies to stretch out to everyone with an internet connection. 

According to recent data, eCommerce spending has risen to $2.1 trillion in the past few years and will reach $5 trillion by 2020. [1]

The consumer is at an added advantage as there is wider variety to choose from, products from any part of the world are accessible, one could access reviews about the products, compare products and prices, and avail more such advantages- at any point of the day, or night- to put simply, the entire world becomes a makeshift shopping arena, all while the consumer is a major commodity themself. With people in the modern world craving for efficiency and speed, e-commerce certainly is the best option due to its easy accessibility, often side-lining retail purchasing options. Faster and damage-free shipping, data security offered by shopping websites, quality of the product, pricing on the products are major deciding factors for when a consumer chooses an e-commerce company to buy his products from, and once he is satisfied, he would naturally choose to go back to the same website for more of his purchases- hence gaining a competitive advantage in the e-commerce market. The ultimatum to any e-commerce transaction is consumer satisfaction, and companies must pay enormous attention to keep their consumers happy in turn to keep their reputation floating high.

“In the EU, during 2015, 76% of the population aged 16 to 74 used the Internet almost every day, and nearly 53% of them purchased online. Out of the total population of Europe, which is 818 million people, 564 million of them use the Internet, while 331 million use online shopping. The total turnover from B2C (Business to Consumer) e-commerce in Europe in 2015 amounted to 424 billion Euros, an increase of 14% in comparison to 2014.” [2]

One such important problem that tags along cross-border e-commerce transactions is that the remedies to any problem with the product or service are complex which discourages consumers in taking part in such trade at all. The element of trust hangs on a thin thread, which creates an inhospitable environment for cross-border transactions. In light of this, consumers too are asked to reveal sensitive personal information to the vendor, creating a cloud of untrust, overlapping the concept of “consumer protection” with “personal data protection”. 

Troubles In The E-Commerce Turf

Companies providing e-commerce services or that sell products online often do not provide important product information that could confuse the consumer, and also not provide their policy regulations of the Government or the laws that would apply on that transaction, payment portals are not usually safe putting the consumer at a higher risk, ambiguity in e-contracts of any transaction, deficient resources to resolve problems, unhelpful consumer helplines- all posing a threat to safer e-commerce transactions, especially in cross-border trade. 

With a constant improvement in technology, it is no news that there is a rise in cybercrimes and cyberattacks. E-commerce transactions are an easy passage to such unfortunate events, pleading for E-transaction laws, data protection laws and cybercrime laws to all fit into the umbrella of “consumer protection”. 

The problems so faced in an e-commerce transaction can be dissected into three- pre-purchase, purchase and post-purchase. 

Pre-purchase phase of a transaction includes complications such as information- when the company provides misleading or wrong information regarding any of their product, misleading the buyer.

Secondly, unfair commercial practices that involve providing false product description and the actual product not meeting the description. The lack of physical communication between the vendor and consumer gives rise to practices like these, leading on to misusing the trust placed on the vendor by the consumer. 

Thirdly, unsolicited communication to the consumer about their products, more easily known as “spam”, without their consent, leading to an unfriendly situation with the consumers. 

Problems during the Purchase phase include Unfair terms of contract- where the vendor often times, taking advantage of the fact that consumers would skip to evaluate the Terms & Conditions of a transaction, add on, unfair terms in the contract, or choose to put legislative provisions that could act against the consumer. 

Secondly, the vendor may often not build a secure online payment portal for monetary transactions, which in turn poses greater threat towards the consumers in terms of sensitive data such as their credit or debit card numbers, or bank details. 

And, to maintain privacy and security while dealing with personal information of consumers, which the vendor might fail to do so. 

The Post-Purchase phase also holds its fair share of faults. Firstly, the information or rules related to liability- when there is a mishap, the terms of the contract that carry the regulations related to liability are often misconstrued while putting the consumer at a larger risk. 

Secondly, the information related to dispute resolution is often masked off, or is inaccurate, leading onto more confusions, which seems to be one of the bigger constraints to effective cross-border transactions. 

Regionally, the concept still seems fresh, and needs time to adapt. “In India the concept of ‘E-Consumerism’ is of recent origin. It is an ignored phenomenon; however, it is needed of the time to adhere to the concept of e- Consumerism. e- Consumerism is a movement of the consumer, by the consumer and for the consumers for the protection of their rights in the online market. E-Consumerism can be defined as all aspects and activities connected, concerned and related with the protection of rights of consumers in the online market or digital economy.”[3]

Mechanisms To Tackle To E-Commerce Problems

It is important to have basic Government intervention to regulate e-commerce trades, but sadly enough, not every country has legislation to do so. It is evident enough to note that being substantially new, most developing and transition economies often find it difficult to keep up with the trends of the worldly advances in the e-commerce department. Mere Government intervention, however, is not a one-stop solution to these modern world problems. The private sector industries that engage in e-commerce trade, along with policy makers should try and chalk out possible legislations that seem fitting to their country. 

“Despite the importance of consumer confidence for business-to-consumer e-commerce, many developing and transition economies still lack laws to protect consumers online. In as many as 57 countries, it was not possible to obtain data, suggesting that online consumer protection is not being fully addressed. Out Of 134 countries for which data are available, 110 have adopted legislation on consumer protection related to e-commerce. That share varies from 73% in Europe to 46% in Africa and 72% in the Americas”- reports United Nations Conference on Trade And Development (UNCTAD)[4].

It becomes quite a task to formulate laws that fit the curvatures of every country and hence e-commerce shall unfortunately operate with no bounds. To try and tackle this abnormality, the International “soft law” contains regulations drafted by international organisations to offer hassle-free, consumer-centric e-commerce trade across the globe. 

The UN General Assembly adopted the Guidelines for Consumer Protection (UNGCP), which facilitated member countries to frame regulations regarding new types of digital trade –particularly in a way that builds system legitimacy and trust between the vendor and consumer, while considering the imbalances in economic nature, educational levels and bargaining powers of various nations.[5]

The OECD (OECD) in its recent update to the “1999 Recommendation” has followed newer trends in e-commerce such as non-monetary transactions, digital content products and mobile devices, providing guidance on advertising and marketing practices to reduce the possibility of businesses exploiting the special characteristics of e-commerce.

The International Marketing Supervision Network, now known as the ICPEN facilitates the exchange of information between relevant authorities, publishes guidelines and has a

complaint site to record online scams.[6]

The past two decades has enabled the WTO to loosen trade barriers and to create necessary regulations related to electronic trade. In January 2019, 76 WTO members, responsible for over 90% of global trade, confirmed their intention to begin negotiations on the trade-related aspects of e-commerce.[7]

In India, the Consumer Protection Act of 1986 establishes that the right to information is defined as “the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices”.

However, as of July 2020, the Ministry of Consumer Affairs, Food and Public Distribution notified the Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020 to accommodate modern problems related to the modern digitization and e-commerce, while providing framework to regulate marketing, sale and purchase of goods and services online. It aims to fundamentally define a “user”, regulate off-shore online marketplaces/transactions, and stipulates specific duties and liabilities to e-commerce entities. In case of violation of any of the E-Commerce Rules, 2020, the provisions of the Consumer Protection Act, 2019 shall apply, thus providing necessary remedies. This new notification aims at consumer-centric provisions and e-retailers must display details about return, refund, exchange, warranty and guarantee, delivery and shipment expeditiously. 

Conclusion 

Electronic trade and commerce, as of now, is only at its initial stages, but has tremendously outperformed in every aspect. Making lives easier, this technological boon comes with its own set of complications, that too, like the technology itself, enhances itself as the days pass. It is notable that there needs to be stringent laws, country-wise as well as internationally to try and control the damage E-commerce proposes to E-consumerism. 

FAQs

1. Why Is E-Consumerism Important?

The concept of E-Consumerism holds utmost importance due to the nature of e-commerce transactions. The lack of communication between the vendor and the consumer could lead to development of unfair trade practices and contract of trade having unreasonable terms, often reducing transparency of the process, or poor dispute resolution mechanisms, often putting the consumer at a larger risk and loss. 

2. What Are The Various Remedies Available In Case Of A Consumer Grievance?

 Although most countries are yet to formulate regional legislation related to unfair e-commerce transactions, some remedy is prescribed by the WTO, UNCTAD, WTO, etc,. To tackle cross-border e-commerce transactions. 

However, in India, the new E-Commerce Rules, 2020 aims to prescribe a framework for all e-commerce transactions in and outside the country.  

References 

Six key challenges facing modern e-commerce 1

https://economictimes.indiatimes.com/small-biz/marketing-branding/marketing/six-key-challenges-facing-modern-e-commerce/articleshow/61503054.cms?from=mdr

Online consumer protection legislation worldwide 2

https://unctad.org/page/online-consumer-protection-legislation-worldwide

The impact of online sales on consumers and firms. Evidence from consumer electronics

https://www.sciencedirect.com/science/article/pii/S0167718717300929

The Influence of Online Shopping Determinants on Customer Satisfaction in the Serbian Market

Nebojša Vasić, Milorad Kilibarda, Tanja Kaurin

https://scielo.conicyt.cl/scielo.php?script=sci_arttext&pid=S0718-18762019000200107#B1

E-Commerce Challenges and Solutions

https://www.researchgate.net/publication/304621797_E-Commerce_Challenges_and_Solutions

The Global Governance of Online Consumer Protection and E-commerce 

Building Trust

http://www3.weforum.org/docs/WEF_consumer_protection.pdf

Consumer protection in electronic commerce

Note by the UNCTAD secretariat

https://unctad.org/system/files/official-document/cicplpd7_en.pdf

Electronic Commerce and the Consumer

https://library.unt.edu/gpo/oca/cb12.html

DIGITAL ECONOMY POLICY LEGAL INSTRUMENTS

https://www.oecd.org/sti/consumer/ECommerce-Recommendation-2016.pdf

India: Consumer Protection (E-Commerce) Rules, 2020

https://www.mondaq.com/india/dodd-frank-consumer-protection-act/980140/consumer-protection-e-commerce-rules-2020


[1] Six key challenges facing modern e-commerce

[2] Online consumer protection legislation worldwide

[3] CONCEPT OF E-CONSUMERISM: A NEED TO REVAMP MOVEMENT FOR E-CONSUMERISM IN INDIA

[4] Online consumer protection legislation worldwide

[5] The Global Governance of Online Consumer Protection and E-commerce

[6] The Global Governance of Online Consumer Protection and E-commerce

[7] The Global Governance of Online Consumer Protection and E-commerce

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