E-commerce and Export Performance By Munib Karavdic

Following a review of the export literature, this study demonstrates that an export marketing strategy in conjunction with a higher level of e-commerce utilisation is associated with improved export performance.

1.2 Motivation of the research

The initial stimulus for this study was driven by the emergence of e-commerce in international markets, lack of academic research, and the anticipated benefits for exporters who use e-commerce in their overseas operations.

Emerging e-commerce technologies are transforming businesses and creating new opportunities and challenges for exporters as many global markets fast become borderless and integrated. Worldwide, there are more than 600 million people connected to the Internet (NUA 2004) and there are some predictions that e-commerce revenue could reach US$1.25 trillion, or about 1.5% of all global sales by 2003 (O’Briant 2000). In Australia, online sales were more than A$2.3 billion in 2001 and are predicted to reach A$6.8 billion by 2004 (Global Internet Statistics 2002). This increasing e-commerce participation by Australian organisations reflects Australia’s second ranking in the e-business readiness ranking worldwide (NOIE 2001). To date, business-to-business (B2B) e-commerce rather than business-to-consumer (B2C) e-commerce constitutes the largest and most important type of business generated through e-commerce environments. B2B e-commerce is estimated to grow from US$403 billion to US$1 trillion from 2000 to 2004, representing 7% of global sales transactions (Gartner Group Inc. 2000). Worldwide, approximately two-thirds of businesses will implement a technology infrastructure for e-commerce (E-business Update 2001). Companies are trying to capture the commercial benefits of e-commerce to gain a sustainable competitive advantage through increased efficiency and effectiveness (Walsh and Godfrey 2000; Kalakota and Robinson 2001). In brief, there is a growing trend in the adoption of e-commerce by organisations both in Australia and worldwide. Thus, understanding the impact of e-commerce on international business is justified as a focus of this research.

The second driving force of this research is the lack of academic studies conducted to understand the impact of e-commerce on export performance. Currently there are no known theoretical frameworks that can fully explain the relative impact of e-commerce in export market strategy.