Professional Documents
Culture Documents
E-Commerce vs. Traditional Commerce
E-Commerce vs. Traditional Commerce
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
by
A Research Paper
Submitted in Partial Fulfilment of the Requirements for
Accountancy, Business and Management (ABM) Strand
March 2020
CHAPTER 1
INTRODUCTION
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
commerce. These services provided online over the internet network. Over the last few decades
or so, e-commerce platforms have slowly penetrated our daily lives. Today, online giant like
Amazon is well known for their great deals and convenient buying options. There is no doubt
that the history of e-commerce is eventful. The history of e-commerce can be traced back to the
1960s when the Electronic Data Interchange was developed. It was intended to replace mail and
fax because it made it possible to exchange data through digital transmission without the need
for human intervention. Not long after that, in 1979, the English inventor was credited with
developing the concept of online shopping. Two websites put online shopping on the map for
good in 1995. Amazon, perhaps the most prominent online retailer today, started out as an online
bookshop and offered more titles than its offline competitors. In 2001, they launched their first
mobile website. There is no stopping e-commerce at this stage, particularly with major
E-commerce is often mistaken with e-business, but they have nothing to do with each
other. E-commerce only refers to the goods and services transaction between a seller and a
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
consumer, while e-business concept is wider than the e-commerce. E-commerce is like an online
shopping market where customers can buy goods and services easily from their home in just
using their phones, laptop or any gadgets and the goods will be delivered at your exact house. E-
commerce is a latest and upgraded type of Traditional commerce because in it there is also an
exchange of goods. In E-commerce the word E stands for “electronic” but when you use it you
will surely say that the word E stands for “easy”. You don’t have the need to go anywhere for the
exchange of goods and services. You can do all of these things online with the comfort of sitting
home, with the use of the internet. E-commerce is often used to refer to the sale of physical
products online, but it can also describe any kind of commercial transaction that is facilitated
through the internet. In e-commerce you must describe products for sale with text, photos, and
multimedia files. In E-commerce most of the time and money can be saved in spending on
traveling and selecting the goods. The payments can be made in any form of digital modes such
as Credit Card, Debit Card, G-Cash, Digital Wallets or Net Banking. E-Commerce provides
greater benefits in buying goods and services easily. If you want to create an e-commerce you
must look at what people wear and how they behave. Observe and write down any ideas you may
think of—without filtering them. Always think about solving people’s problems and bear in
mind that the entrepreneur’s mind needs training. The most important thing is that you have this
or information, is usually physical, meaning there is the existence of a physical store. It is one of
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
the oldest purchasing methods for products and services. It's done by nearly everyone around the
globe. Just go to a store or marketplace, choose an item and pay for the product. Traditional trade
is part of a business that involves all the business-friendly activities. Trade and trade auxiliaries
are the two main types of actions. Trading is the purchase and sale of goods and services for
transport, insurance, packaging, marketing and advertising, and more. More about traditional
trade is that it includes all the activities that make direct exchange between the manufacturer and
the consumer of goods and services. Production of goods is not directly reaching the consumer.
Reasonably it goes through various trade-included activities. It also requires a retail store and an
customers and thrives based on word of mouth. Personal interaction is the key component of a
business’s experience success with traditional commerce. It began at the time of the barter
system which was introduced in the early millions of years ago. The barter system defines the
exchange of goods with other goods instead of money where money was not available during
those days. This is where Traditional Commerce began and has been continuing till today in the
form of exchanging money rather than with only goods. Many businesses that trade their goods
and services such as this network within society are establishing relationships with city leaders,
chambers of commerce, as well as sponsoring local sports teams and events to attract business
and develop community relations. Traditional commerce allows a buyer to be physical inspect
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
goods and test out services before making a purchase therefore, personal communication is a key
Following the discussion above, both traditional and e-commerce are modes of
exchanging goods and services. Each has its pros and cons. e-Commerce is like conventional
commerce with the major difference being the platforms via which the exchange and business
transactions occur. E-commerce saves consumers a lot of time and is therefore convenient
because you can buy goods and services in the comfort of your home or just from anywhere at
any time. Traditional commerce works in such a way that you have to take time and go to the
place/ store where goods and services are stocked hence consuming a lot of time. E-commerce is
not appropriate for perishable goods, and high-value items, so traditional commerce is the one
that can better work with such. On the other hand, it is not suitable for software or music
We are conducting this study to know which of these has the more profitable because it
can help the future business owners or even us to decide which business is easy and good for
running a business.
Conceptual Framework
Collection of Data
Survey Questionnaire
Analysis of Data
Percentage of Distribution
This study aims to identify the comparison between the profitability of E-commerce and
traditional commerce businesses. Specifically, this study aims to answer the following questions:
a. Type of Business
b. Age
c. No of Years in Business
commerce businesses?
3. How e-commerce and traditional commerce does affects the buying behaviour of the
customer?
Hypothesis
Null Hypothesis
traditional commerce.
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
Alternative Hypothesis
commerce.
Definition of Terms
This part of the study aims to define some important words used in our study.
E-Commerce. It is a process of buying and selling of goods, products or services over the
internet by using cellular phones, laptops, computers and other gadgets.
Ecommerce refers to both online retail and online shopping as well as
electronic transactions or transaction of money and funds.
Traditional Commerce. It is a process of buying and selling products, goods, and services
within a single industry or face to face interaction with customers
or seller. It is a personal transaction or business network within the
community.
This study aims to be help or a tool to show the study of profitability between the
comparison of E-commerce vs. Traditional commerce, so the online seller, traditional seller, the
economy and the individuals will know how to respond or react if there is a chance that they will
Online seller. In this study online seller may know on what they will do to help their
Traditional seller. This study traditional seller may know on what will they do to help their
To individuals. The study may encourage the individuals to make their own business like
economy's growth
To future researcher. The study will guide them to their study and become their reference on
their research
This study will reflect the comparison between E-commerce and Traditional commerce
in terms of Profitability at Castillejos, Zambales. The information that will be gathered through
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
between E-commerce and Traditional commerce in terms of Profitability, and how did it helped
CHAPTER 2
Related Literature
Foreign
According to a statement by Amrish Rau, CEO of PayU India “Around 40 per cent of
COD was driven by black money according to a study done two years ago.” Demonetization
cracked down the whip on black money forcing people to go digital. In fact, the first 2 months
after Demonetization did see a decline in e-commerce growth in India as there was a reduction in
sales. The cash crunch and cap on ATM withdrawal limits affected the buying capacity of
majority of consumers, especially customers in tier-2 and tier-3 cities who are used to the
payment mode of COD. Some of the online retailers had to temporarily suspend their COD
payment option. Redseer Management, a research and advisory firm, projected in August 2016
that the e-commerce industry in India would see a growth of $79.41 billion by 2020. But
Demonetization managed to upset the numbers and the growth for 2020 is currently pegged at
$47.45 billion.
As we all know, internet and e-commerce are entirely committed towards every
developed country. But we think it can be accomplished and can make a remarkable benefit to
developing countries also if an ideal business purpose can be made. Ohidujjaman et.al, 2013
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
clearly discussed that E-commerce is a revolution & turning point in online business practices
and can make a huge contribution to the economy and Hasan et.al, 2010 also indicated that
business strategy and a strong catalyst for economic development. A huge amount of research
works has been done on e-Commerce which is basically on online shopping. A large group of
researchers has found out and also pointed out the necessity and possibilities of Online
Shopping. On the other hand, limitation of ecommerce is found and at the same time, they
provided essential suggestion and came to a prediction to make Online Shopping more useful for
the consumers. But the contribution of traditional marketing is also inescapable but compare to
online shopping it is less effective we think. So on this basis, Mehrdad Salehi et.al, 2000 found
out distinguish between online marketing & traditional marketing. Though most of the people of
Bangladesh especially the rural people are not enough capable of operating internet to run the
online business. For that reason, they need to be dependent on traditional marketing.
Local
transactions have emerged through the years such as auctions, online shopping, and online
banking (Lacson, Pasadilla, 2006). This just shows that Filipino businesses welcome this new
opportunity in selling goods since 16% of the population is using Internet. This new marketing
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
strategy will not only benefit those big companies but also the small businesses who cannot
afford to advertise their products. Just by creating a website in a very affordable cost would
make the business grow in terms of sales and enhance the company image as well.
Philippine firms have yet to fully tap the potentials of e-commerce that will help them to
compete in domestic and global markets. In the process of preparing themselves to conduct e-
commerce, these firms will be changing the way they do business. These changes are expected
to have an impact on the welfare of Philippine workers. Most efforts to measure the economic
Europe, who are considered to be the leaders in e-commerce. (Roberto, 2002) In general, it
discuss the changes in the nature of work from the front to back office is likely within the sectors
performing services Employment demand for these industry, they may be focused away from
agents and blue collared workers, toward higher management and executive staff.
As Filipinos entered the 21st century, local e-commerce transaction reached Php 1
billion. It shows that there’s at least one billion transaction sales growth annually. If this trend
continues, figures can reach up to Php 20 billion as more businesses conduct online transactions.
If significant economic growth takes place in the next 10 years, these estimates may even double
Information and Communication Technology (ICT) has become and will continue to be
an integral part of the day-to-day life of every Filipino across all levels of our society. The
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
occurrence of communication technology around the world necessitates that government get on a
cohesive and coordinated strategy on how to prepare its citizens to survive, live and thrive in a
digital world.(The Philippine Digital Strategy Transformation 2.0: Digital Empowered Nation
2011).
Related Studies
Selling and buying through electronic media is one of the fastest growing methods of
trading worldwide. Organizations are engaging in Business to business (B2B) trading where
companies trade and exchange information using the World Wide Web. Organizations and
(C2C) where companies deal directly with customers through electronic media. This study
sector. The population of the study was 218 firms as listed by CCK. The data was gathered using
a questionnaire and this analyzed using combination of descriptive, inferential and relational
statistics. The findings of the study indicate that e-commerce leads to an increase in turnover and
customers which ultimately leads to an increase in profitability. Further the studies pointed out
that focus on having an online presence, online lead generation and online sales led to increased
business profitability. This information is useful to both the Government and businesses keen on
adopting e-commerce. The study further recommends faster adoption of 4G networks and also
laying of sea cables to make internet charges competitive and affordable to both businesses and
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
web sites is of great importance. Web sites are being widely deployed throughout industry,
education, government, and other institutions. In practice, the importance of the use of Web
technology for electronic commerce (EC) activities has been discussed widely. Electronic
electronic transactions through computer networks. EC can help business organizations cut costs,
interact directly with customers, run more smoothly and in a timelier manner, and even better, it
can help an organization outperform its competition. In the Internet era, users experience an
organization’s Web site’s quality before they decide whether to commit themselves to the
organization (Nielsen 1999). Further, Nielsen (1999) notes that the Web site functions as a
“window” through which users have their initial interaction with the organization. Evans (1999)
asserts that its design crucially affects their perception and attitude toward the organization. In
the last ten years, studies have focused on the design of Web sites for general information
seeking and for electronic commerce purposes. In the Web environment for general information
seeking and business-to consumer electronic commerce, users are customers. Understanding
their expectations and how they feel about the Web sites they use is becoming a very serious
concern. A company’s continued success comes from two groups: new customers and repeat
customers. Since it always costs more to attract new customers than to retain current customers,
customer retention is more critical than customer attraction. The key to customer retention is
customer satisfaction. Delighting customers goes beyond satisfying them. Delighted customers
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
are more effective advocates for a company than all the paid advertisements it places in the
media. While the success of a company or an organization is dependent on many factors, its Web
site plays a central role. In the Internet era, users experience an organization’s Web site’s quality
before they decide whether to commit themselves to the organization. The Web site functions as
a “window” through which users have their initial interaction with the organization. Its design
crucially affects their perception and attitude toward the organization (Nielsen, 2000).According
to Nielsen (2000), web site simplicity should be the goal of web page design because users
always focus on the contents and interface. Therefore, it is important to ensure that web page
design can work with different platforms .Nielsen, (2000) explains that content is the vital part of
web sites due to the first appearance to users. Quality of the content is one of the two most
writing, beautiful pictures and multimedia) is graded in the second rank. Therefore, content
developers should take the following questions into account: “What is relevant for me?” and
“How does this web site help me to solve the problems or answer the questions?” Furthermore,
since web users are goal driven and impatient, the provided content needs to be focused towards
speedy answers and usefulness to the users.In general, the e-business systems published on the
Internet should be matched for the paradigm of the universal design highlighting on user contexts
probably a good place to start first, and it seems the opposite is true as well. Across the globe
there are over two billion internet users and this number grows by two hundred million annually
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
hence the need to evaluate the benefits of using internet and specifically for the ecommerce, the
benefits of using the website in relation to the business performance (Schneider 2003).Good
websites not only attract and sale to customers, but also increase the potential of return visits.
This raises important implications for organizations thinking of making an appearance on the
internet (as well as presenting them with pertinent issues to keep in mind when designing their
websites) Lyer et al. (2000). Also, high quality websites lead to a favorable attitude towards the
websites and products and services offered (Liu et al., 2001). A web site can improve
communications with other organizations, thus improving the efficiency of business processes by
increasing direct sales and reducing costs (Zona Research Inc, 2000). Schneider (2003) suggests
that the benefit of improved communication extends also to the businesses customer base, in that
the organization can receive feedback directly from customers. Zona Research Inc. (2000) states
that poorly constructed web sites can lead to lost revenues from non-realized transactions and
negatively affect organization image. Harley et al., (1998) concluded that poorly designed web
sites can lose 50 per cent of potential sales when people cannot find what they are looking for,
and that 40 per cent of users do not return to web sites who uttered negative first experience .E-
commerce continues to grow in leaps and bounds and some of the latest trends aimed at making
it a powerful domain adopted from the Netcraft Survey (2012) include; Personalized services
may not be new but it is definitely going to be one of the popular trends in e-commerce. By
continuously monitoring the buying pattern of consumers using the newest technologies, the
content of the site can be designed to meet the needs of target audience. Apart from e-commerce
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
being more personalized and mobile, technology will be playing an important role in making it
more realism based. . Social media is one of the reliable methods to market products and
services. Channels like Facebook and Twitter are just getting better along with some new
additions like Pinterest which helps in establishing a foothold for business benefit. In 2013 the
integration between e-commerce and social media is all set to become more intense.
The relationship of the previous studies to the researchers’ present ideas is that both
studies shows and compares the profitability rate of being in e-commerce and in traditional
commerce businesses. Both also cite what kind of strategies do sellers needs to do to make their
business more profitable than others. The researchers used the previous studies and ideas as a
guide for their research to become more truthful and reliable. Through this work of them, this
will let the business owners know which is more profitable, e-commerce or traditional commerce
businesses.
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
CHAPTER 3
RESEARCH METHODOLOGY
Research Design
This study aims to identify the comparison between the profitability of e-commerce
design. Both qualitative and quantitative research methods will be applied in this study.
Population
Sampling Method
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
The sampling method is purposive random sampling. The setting where the study will be
taken is in the field. Researchers purposely random select different store (as traditional
commerce) and e-commerce businesses both here in Castilejjos, Zambales as their respondents.
population and the objectives of the study. Purposive sampling is also known as judgmental,
question. In part I which includes the profile of the respondents, part II will be the qualitative
questions, a five-point Likert Scale where in respondents will put a check or the rating scale they
prefer and in part III, it is an open-ended questions that the respondents will ask to give their own
The question formulated will be answered by the respondents. Those questions will help
commerce. Survey questionnaire will be the main instrument in gathering the data.
Researchers will analyze the data through getting average rating per responses
and will prepare conclusion as follow.
Finally, researchers can clarify whether reject or fail to reject the null
hypothesis.
Treatment of Data
Department of Education
Region III
Schools Division of Zambales
CASTILLEJOS NATIONAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Castillejos, Zambales
_____________________________________________________________________________________
For the statistical treatments of the research data, this study will utilize frequency and
distribution, mean, and t-test. Researchers will use frequency and percentage distribution for the
first part of the survey and mean, as well as t-test for the second part of the survey questionnaire.
Though this statistical treatment, accepting or rejecting the null hypothesis will be stated. For the
f
Formula is %= × 100
n
Where:
% is the percentage
f is the frequency
Formula is