Web 2.0 Problems

Web 2.0 e-commerce has provided businesses with unprecedented opportunities to reach customers through multiple channels, including social media, mobile apps, and email marketing. However, this evolution in e-commerce has also brought several challenges for businesses to navigate.

Lack of Security

Data privacy and security have emerged as one of the critical challenges confronting Web 2.0 e-commerce. As businesses continue to accumulate vast amounts of customer data, the risk of cyberattacks and data breaches increases. Such incidents can have severe consequences, including damage to reputation and a loss of customer trust. Given the stakes involved, businesses must prioritise the protection of customer data and invest in robust security measures to prevent data breaches.

Centralisation

Centralised servers imply a concentration of power and authority in the hands of a few entities, which often results in the involvement of costly middlemen and intermediaries. Moreover, the governance of web 2 platforms tends to prioritise the personal profit of large corporations rather than the interests of users and smaller businesses. This situation often leads to monopolized marketplaces that impose high costs on brands and contribute to the rising customer acquisition costs. Additionally, the ROI on influencers and content creators is declining over time, making it harder for businesses to justify their investment in these channels.

Customer Engagement

Web 2.0 e-commerce poses a significant challenge for businesses when it comes to customer engagement. The plethora of channels available to reach customers makes it difficult to maintain a consistent brand experience across all touch-points. Additionally, delivering personalized experiences to customers is essential to keep them engaged, but it requires significant time and resources. As a result, businesses may face higher costs to create compelling customer experiences that meet their expectations.

As a consequence, businesses have been engaged in a fierce competition to offer the lowest prices, even if it means sacrificing their profits. This "race to the bottom" has become a prevalent trend in the industry, with many companies struggling to remain competitive and profitable in a crowded marketplace.

Data Analytics

Web 2.0 e-commerce generates an enormous amount of data that can overwhelm businesses. With data coming from various sources and channels, businesses require sophisticated analytics tools to make sense of the data and uncover actionable insights that can improve their e-commerce operations. Investing in such tools is essential to stay competitive and derive value from the vast amounts of data available to businesses today.

Transparency

One of the significant drawbacks of Web 2.0 is the lack of transparency, which can lead to product fraud, including counterfeiting and unauthorized sellers. These types of fraud erode customer trust in a brand and create opportunities for unaffiliated market actors to benefit from the brand's intellectual property without passing any value back to the brand. As a result, brands are generating value that they cannot profit from, while third-party actors farm valuable data from both brands and customers. This data is often used in various types of fraudulent activities, exacerbating the challenges posed by the lack of transparency in Web 2.0 e-commerce.

Poor Customer experience

Since the global pandemic, e-commerce has been plagued by a significant pain point - the use of reselling bots and automated checkout systems. These bots are primarily utilized by resellers and scalpers, who purchase high-demand products in bulk and re-list them at a higher price, leading to price gouging and limited availability for regular customers. The counterfeit industry has also grown rapidly, with some sellers listing non-existent products or fake versions of popular items. Both issues undermine customer trust and create a negative impact on the e-commerce industry as a whole.