The Effect of Cybersecurity Threats on Small Ecommerce Enterprises (1)-1
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Dec 6, 2023
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The Effect of Cybersecurity Threats on Small-scale Ecommerce Enterprises
The past decade has seen the emergence of ecommerce as disruptive and indispensable
retail option for many consumers around the globe. The emergence of ecommerce as the
preferred shopping experience by global consumers has radically transformed the business
landscape, especially in the retail industry. Online shoppers surpassed the two billion marks in
2020, which represented just over a quarter of the world’s total population. The industry grossed
an estimated $4.8 billion in sales over the same period. The rapid growth of ecommerce as a
preferred retail shopping option for many consumers has coincided with the growing ubiquity of
Internet and digitization of all spheres of human life.
The purchasing decision and behavior of the modern consumer is influenced by a
redefined concept of customer experience, with convenience featuring high on the list of factors
consumers consider before making any purchase. Online shopping offers a level of a convenient
shopping experience unrivaled by the traditional brick-and-mortar stores (Wu, Chiu & Chen,
2020). Geographical, spatial, and temporal barriers do not hinder online transactions. But the
reliance of the booming ecommerce on technology, especially the Internet exposes the industry
to cybersecurity threats that can adversely affect the success of small-scale enterprise.
Electronic commerce (ecommerce), also known as Internet commerce, was idealized in
the 1970s but gained traction in the early-1990s. The business model is premised on facilitating
business-to-business (B2B) and business-to-consumer (B2C) transactions and transfer of
associated data, information, and money via the Internet. Ecommerce also encompasses direct-
to-consumer, consumer-to-consumer, and consumer-to-business transactions. The futuristic
business model was fueled by technological revolutions, including the dotcom bubble which
heralded a rapid adoption of technology in late 20th century. Ecommerce retail giants such as
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eBay, Amazon, and Alibaba were founded on the backdrop on this technological revolution in
late 1990s. Today, the online retail industry boasts of millions of small-scale enterprises and
multinational corporations, with dozens of applications that transcend different sectors and
industries. The industry’s global sales in 2020 was estimated at over $4.8 billion with future
projections showing an upward trend. The industry is the backbone of many sectors and supports
millions of households through direct income and employment. Small-scale enterprises, in
particular, benefit from exposure to global client base and significant reduction in startup capital
and operation costs.
Ecommerce is one of the fastest growing industries in the world, with sales volume
reaching record numbers in the past few years. The industry hit the $4.2 trillion mark in sales,
celebrated over three decades since conceptualization, and boasts of a wealth of innovative
technologies (Coppola, 2021). But the global ecommerce is still vulnerable to cybersecurity
threats. From malware to bad bots, e-skimming, credit fraud, and distributed denial of services
(DDoS), small and big online enterprises contend with multiple and serious cybersecurity risks
and threats that can derail business operations. The integration of third-party services on
ecommerce platforms, a necessity for the ultimate online shopping experience, heightens
cybersecurity threats and risks associated with online trading (Pizzi & Scarpi, 2020; Sangeetha &
Suchitra, 2016). The use of electronic payment systems such as e-banking or e-cash further
increases the risks of unauthorized parties accessing personal information for nefarious purposes.
Online payment systems are relatively difficult to track, especially by regulatory authorities such
as tax authorities. Self-regulation further compounds the problem as the industry lacks effective
standards to safeguard against malpractices Barkatullah, 2018). The temptation and risk of tax
evasion, particularly for small businesses increases. The success of small-scale enterprises is
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defined by small margins. Any slit changes in variables of success can lead to operational and
financial changes.
Whether intentional, accidental, or human error driven, cybersecurity attacks or threats
have financial implications that can derail the operations of small-scale ecommerce enterprises.
Online trading is primarily founded on trust. Loss of trust by clients due to e-skimming or
malware attacks can push small businesses out of operation (Lowry et al., 2006). In July 2021,
Amazon was fined $886.6 million by regulatory authorities in Luxembourg for violating the
handling of clients’ personal data (Bodoni, 2021). Many small firms cannot survive the negative
reputation associated with client data breaches or the consequent regulatory authority operational
and financial fines.
In conclusion, ecommerce is one of the fastest growing and biggest industries in the
world in terms of market capitalization, customer base, and sales volume. The industry is the
backbone of many economies and households, employing millions of people around the globe.
However, the technological revolution that spearheaded the industry’s growth also exposes it to
cybersecurity threats and risks. Small-scale ecommerce enterprises are at a greater risk of being
adversely affected by these threats and risks due to their financial and operational strengths.
Tackling these cybersecurity issues in the small and medium size sector requires greater input
from governments and associated regulatory authorities. Small-scale enterprises also need to
invest advanced cybersecurity technologies.
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Works cited
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