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Wednesday, August 16, 2017

Cybercrime on the Rise: Is This Still a Good Time to Invest in E-commerce Stocks?

by Editor (editor), , August 08, 2017

As e-commerce revenue continues to grow and seems like an appealing ground for potential investors, could this situation be affecting the prosperity of e-commerce stocks – and how?

In the wake of the recent WannaCry and NotPetya ransomware attacks, it is hard not to notice that cybercrime is on the rise, even if you're not a hardcore techie. As e-commerce revenue continues to grow and seems like an appealing ground for potential investors, could this situation be affecting the prosperity of e-commerce stocks – and how?

Cybercrime - and Cybersecurity Spending - on the Rise

In fact, according to the Global State of Information Security Survey 2015 by PWC, cybercrime has been on the rise for a while now: since 2009, detected security incidents have been increasing by 66% year-on-year and amounted to global losses of $42.8 million and an average of 117,339 attacks per day in 2014. A couple of years later, the situation seems to have only worsened – the FBI Internet Crime Complaint Center reported $1.33 billion in victim losses in 2016 in the US alone, and South Africa features 12th in its Top 20 Foreign Countries by Victim. So is this really a good time to be investing in e-commerce stocks?

Source: Pixabay

The answer really depends on whether e-commerce companies are aware of the dangers involved and properly equipped to handle them. The first is really hard to miss: reports over cybercrime incidents have been making the headlines a lot lately and cybersecurity appears to feature heavily on everyone’s agenda. It is estimated that cybersecurity spending exceeded $80 billion in 2016 and is projected to reach $1 trillion between 2017 and 2021. As for what can be done to thwart hackers, enterprises actually have a couple of aces up their sleeve.

Tech Solutions that Guard against Hackers May Be Key for Ensuring Financial Viability

One of the most crucial concerns for e-commerce companies is of course customer frustration over websites crashing or underperforming as a result of cyber attacks – although poor performance may have other causes, too. According to research published on Jeffbullas, 25% of clients have said they will leave a website if the page doesn’t load within four seconds and 46% don't plan on ever returning to it if performance is too poor; in e-commerce specifically, 70% of online shopping carts are abandoned annually, 46% of which are due to slow site speed – which means $3 billion in lost profits each year.

Source: Pixabay

To address the issue, tech solutions that deal with problems in site performance are widely available: for example, choosing the right host provider that views speed and efficiency as a priority might work wonders for how an online store deals with increased traffic. Load balancing is another option for addressing overwhelming traffic – the term describes the process used to optimize traffic distribution, maximize application performance and reduce server load. In essence, traffic is distributed across multiple servers within a given data center according to a user-defined distribution policy, thus avoiding overload on one single resource. Since Distributed Denial of Service (DDoS) attacks - a popular hack attack method - work by making online services unavailable by overwhelming them with traffic, such solutions can prove pivotal to keeping services going and customers happy.

So even though cybercrime can have serious financial ramifications for companies, businesses just need to get a bit more tech-savvy and invest in options that keep their servers clean, their sites online and their revenue steady. This will allow them protect their stock reputation and take advantage of the financial momentum, as retail e-commerce sales are projected to exceed $4 trillion in 2020, according to eMarketer, making up almost 15% of total retail spending that year. As an investor, it pays dividends to look into the level of security an e-commerce business you're looking to invest in employs, as well as their overall tech infrastructure.



About the Writer

Editor is an editor for BrooWaha. For more information, visit the writer's website.
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