D fi iti

Definition
 Electronic Commerce, commonly known
as e-commerce,, consists of the buying
y g
and selling of products or services over
y
electronic systems such as the Internet
and other computer networks .
 G l off e-commerce
Goals
 Reduce costs
 Lower product cycle times
 Faster customer response
 Improved
I d service
i quality
lit
 E
E-commerce applications
li ti
 Supply chain management
 Video on demand
 Remote banking
 Procurement
P t and
d purchasing
h i
 Online marketing and advertisement
 Home shopping
Advantages of Electronic Commerce

 Faster buying/selling procedure, as well as

y to find products.
easy p

 Buying/selling 24/7
24/7.

 More reach to customers, there is no

theoretical geographic limitations.
 Low
o ope
operational
a o a cos
costs
saand
d be
better
e qua
quality
yoof
services.

 No need of physical company set-ups.

 Easy to start and manage a business.

 Customers can easily select products from

different providers without moving around
physically.
physically
Disadvantages of Electronic
Commerce
 Loss of ability to inspect products from
remote locations
 Difficult to calculate return on investment
 Cultural and legal barrier
H
How can E
E-commerce be
b used?
d?

 Community-based services: Payment of utility

bills, traffic fines, donations to charity etc.
 Shopping: Buying and selling goods and
services
 Communication: E-mail, Net telephony products
can be commerce-enabled and serviced via the
Net.
 1 Consumer finds 6
something she wants to Verification and
buy at a “shop” on the remittance of actual
Net funds
Shop

2 Consumer sends on
enciphered request for
payment to her bank

The electronic bank Consumer’s Bank

3 sends back a secure Consumer
C
packet of e-cash Public Key

Merchant The shopp

Server 5 sends the
packet of
cash to its
bank
Consumer
sends the e-
4 cash to the
shop Shop Merchant Bank
 E
E-commerce f
framework
k
 E-commerce applications will be built on
the existing technology infrastructure-

 Computers

 Communications networks

 Communication software forming the

emerging
i iinformation
f ti superhighway.
hi h
 None of these uses would be possible
without each of the building blocks in the
infrastructure:

 Common business services infrastructure.

 Messaging & information distribution

infrastructure.
infrastructure

 Multimedia content & network publishing

infrastructure.

 Information superhighway infrastructure.

 The 2 pillars supportingg all e-commerce –
applications & infrastructure are:

 Public policy, to govern such issues as

universal access,, privacy
p y & information
pricing.

 Technical standards, to dictate the nature of

information publishing, user interface &
transport in the compatibility across the entire
network.
 EC
E-Com & media
di convergence
 Convergence – is the melding of
consumer electronics,, television,,
publishing, telecommunications, &
p
computers for the p
purpose
p of facilitating
g
new forms of information-based
commerce.
 Multimedia
u ed a co
convergence
e ge ce – app
applies
es to
o the
e
conversion of text, voice, data, image,
graphics
g p & full-motion video into digital
g
content.

 Driving the phenomenon of convergence

are some simple technological advances:
advances:-
 Convergence of content all types of
i f
information
ti content-
t t books,
b k b business
i
documents, videos, movies, music- into
di it l iinformation.
digital f ti
 Convergence
g of transmission compresses
& stores digitized information so it can
g existing
travel through g phone & cable
wiring.
 Convergence of information access have
the superiority to function as both
computers & televisions.
 Convergence is also being by of certain
market conditions including the following:-

 The widespread availability of increasingly

low-cost,
low cost, high-performance
high performance enabling
component technologies.

 Entrepreneurs who are feeding on

anticipated
ti i t d end-user
d d
demandd ffor new
applications- both products & services- that
the rel
they rely on the abo
above
e mentioned enabling
technologies.
 Aggressive
gg regulatory
g y actions that are
introducing competition in monopoly
g
markets-local & long-distance
communications, telecommunication &
cable equipment & right-of-way to
customers curb- & that serve to facilitate
the rapid deployment of these new
application.
 The anatomy of e-com
e com
application
 We will examine e-com applications that
serve as access points.
p
1. Multimedia content.
2
2. Multimedia storage serves
serves.
3. Information delivery system, the network
service
i providers.
id
 Anatomy of E-
E-Commerce Applications

Computer Game
computer
Applications Video
servers
servers

PersonalPDA Network
digital Internet Corporate
servers
assistant
telephone
Telephone

Libraries
Network • Chatlines
•Software
TV TV Network
Service
Provider
service
provider Government
servers Electronic
printerPrinter
p publishing
p g

Information Servers with

Consumer
Consumer Devices
devices Variety of Content
 Multimedia content for e-com
e com
application
 Multimedia content can be considered
both fuel & traffic for electronic commerce
application.

 Possible components of multimedia are

numerical data
data, graphics
graphics, text
text, images
images,
audio, video, animation.
 Multimedia is the natural wayy people
communicate.
 Its purpose is to combine the interactivity
of a user-friendly interface with multiple
forms of content.
 Multimedia has come to mean the
combination of computers
computers, television &
telephone capabilities in a single device.
 The traditional, separate business divisions
presented in this table
table.
Industry Content produced
Entertainment Cartoons, games, movies,
producers video, music
B d
Broadcastt television
t l i i G
Game shows,
h
productions documentaries,
entertainment programs
Print publishing Books, reference
collections directories
collections, directories,
catalogs
Computer software S/w programs: animation
animation,
games, productivity-
enhancing tools.
 Multimedia storage servers and
e-commerce applications
 E-commerce requires strong(robust)
g amounts
servers to store & distribute large
of digital content to consumers.
 These multimedia storage servers are
large information warehouse capable of
handling various content
content, ranging from
books, newspapers, advertisement,
catalogs movies
catalogs, movies, games & x-ray
x ray images.
images
 Digitized
g content eliminates the bulkiness
& mechanical unreliability found in past
equipment.
 For e.g.:- cassette & DVD.

 Client-server architecture in e-commerce:-

 All e-com applications follow the client-
server model. (fig)
 Processed request

Application Application
logic logic
Presentation Result Multimedia
logic content
Multimedia desktop Multimedia server

Fig:- Distribution of processing in multimedia client-server world

 C e s = de
Clients devices
ces + sosoftware
a e that
a request
eques
information from server.
 The client- server model
model, allows the client
to interact with the server through a
request reply sequence governed by a
model know as message passing.
 The server manages application tasks tasks,
handles storage & security, & provides
scalability – ability to add more clients as
needed for serving more customer.
 Internal processes of multimedia servers:-
 Internal processes involved in the storage,
retrieval & management of multimedia
data objects are integral to e-commerce.
 Multimedia server is a hardware &
software combination that converts raw
data into usable information & then “dishes
dishes
out” this information where & when user
need itit.
 Multimedia servers provide a core set of
function to display, create & manipulate
multimedia documents; to transmit &
receive multimedia documents over
computer networks, & to store & retrieve
multimedia documents.
 E.g.:
E.g.:- video on demand.
 Architectural framework for
electronic commerce
 In general a framework is intended to define &
create tools that integrate the information found
in today’s closed systems & allow the
development of e-commerce application.
 The architecture should focus on creating the
various resources already in place in
corporations to facilitates the integration of
data & software for better applications.

 Electronic commerce application architecture

consists of 6 layers of functionality
1. A li ti
Applications.
2. Brokerage services, data or transaction
management.
management
3. Interface & support layers.

4. Secure messaging, security & electronic

document interchange.

5. Middle & structured document interchange.

6. Network infrastructure & basic communications

services.
EC
E-Commerce A
Application
li ti services
i

 Distinct Categories of e-Commerce

1. Consumer to Business (C2B)

2
2. Business b siness (B2B)
B siness to business
3. Intra-organizational e-commerce
 Global suppliers

Classic
C ass c EDI

Procurement, distribution and logistics

Engineering Manufacturing Accounting,

and research and production finance and
Internal management
Private
Commerce publishing

Advertising Sales Customer service

Consumer-oriented
e-commerce Fig:-Different types of
electronic commerce
Customers
application
 Consumer-to-Business (
(c2b):-
)
 We call this category marketplace
transaction.
transaction
 c2b is when consumers band together to
present themselves as a buyer in group
group.
 The customers learn about products
diff
differently
tl th
through
h electronic
l t i publishing.
bli hi
 Business-to-business (b2b) Transactions:-
 We call this category market-link
transaction.
 Also known as Inter
Inter-organization
organization
e-commerce.
 It refers to the full spectrum of
e-commerce that can occur between two
organizations.
organizations
 This includes purchasing and
procurement, supplier management,
inventory management, channel
management, sales activities, payment
management &service and support.
 Businesses, governments, and other
organizations depend on computer-to-
computer communication as a fast,
economical, and a dependable way to
conduct business transactions.
 B-to-B transactions include the use of EDI
and electronic mail for purchasing goods
and services, buying information and
consulting services, submitting requests for
proposals, and receiving proposals.
 Intra-organizational
g Transactions:-
 We call this category market-driven
transactions
 A company becomes market driven by
 Dispersing
Di i th
throughout
h t ththe fifirm iinformation
f ti
about its customers and competitors
 Spreading strategic and tactical decision
making so that all units can participate
 Continuously monitoring their customer
commitment by making improved customer
satisfaction
sa s ac o a an o
ongoing
go g objec
objective e
 Three
ee major
ajo components
co po e s oof market-driven
a e d e
transactions are:
 Customer orientation through product and
service customization
 Cross-functional coordination throughg
enterprise integration
 Advertising
g , marketing,
g and customer service
W ld wide
World id web
b as th
the architecture
hit t
 What Is the World Wide Web (WWW)?
 The world wide web (WWW) is a subset of the
computers
t on th
the IInternet
t t th
thatt connectt in
i a certain
t i way,
making their content accessible to each other.

 The WWW includes an easy to use standard interface

facilitating ease of use
 The architecture is made up of three primary entities:

1. Client browser.

2. Web server.

3. Third- party services.

 Client browser WWW servers functions Third-party service

Digital library of
Local or company-
p y Information documents/ data
specific data retrieval servers

Data & Third party

Mosaic/WWW transaction information
browser management processing tools/
services

Browser Secure Electronic

extensions messaging payment servers

Fig:- block diagram depicting an electronic commerce

architecture
 Client browser usually interacts with WWW server
server, which
acts as an intermediary in the interaction with third-party
services.

 The client browser resides on the user’s PC or

workstation & provides an interfaces to the various types
of content.

 Web server functions can be categorized into information

retrieval, data & transaction management & security.
 The third-party
Th thi d t services
i couldld b
be other
th web b servers
that make up the digital library, information processing
tools, & electronic payment system.

 The web has become an umbrella for a wide range of

concepts
t & technologies
t h l i th thatt diff
differ markedly
k dl iin
purpose & scope.

1. Global hypertext publishing concept.

2. The universal reader concept.
3. The client server concept.
 The global
Th l b l hypertext
h t t publishing
bli hi conceptt promotes t theth
idea of seamless information world in which all on-line
information can be accessed & retrieved in a consistent
& simple-way.

 The universal readership concept promotes the idea

that, unlike the segmented application of the past, we
can use one application- a universal user interface- to
read a variety of documents.
 The client-server concept the web to grow easily
without
ith t any centralized
t li d control.
t l

 Anyone can publish,

publish read or download information
information.

 Publishing
g information requires
q a server p
program.
g

 Reading data requires a client browser.

 In practice the web hangs on a number of essential
concepts including the following:-
concepts, following:

 The addressing scheme know as uniform resource

locators (URL) makes the hypermedia world possible
despite many different protocols.

 A network protocol known as hypertext transfer protocol

(HTTP) used by the client browser & servers offers
performance & features not otherwise available.
 A mark-up language (HTML) which every web client is
required
i d tto understand,
d t d iis used
d ffor th
the representation
t ti off
hypertext documents containing text, list box, & graphics
information across the net.
 S
Security
it and
d th
the web
b
 The lack of data security on the internet has become a
high-profile problem due to the increasing number of
applications oriented towards commerce
commerce.

 Many commercial applications require that the client &

server be able to authenticate each other & exchange
data confidentially.
 Exchange has 3 basic properties:-
1. Client are confident about servers they are
communicating with.

2. Client conversation with the server is private.

3. Client’s conversations cannot be tampered or

interfered.
 Several software companies & electronic marketplace
providers
id are ttackling
kli ththe iissues off secure HTTP
implementations by developing additional data security
measures that involve encryption.
y

 Encrypted information can be “unlocked” only by the

i t d d recipient
intended i i t th
through
h a di
digital
it l kkey.
 Categories of internet data &
transactions :-
 Several categories of data must be encrypted, making
i t
internet
t data
d t security
it an interesting
i t ti challenges:-
h ll

1
1. Public data have no security restrictions & can be
read by anyone.

2. Copyright data have content that is copyright but not

secret.
3. Confidential data contain material that is secret but
whose
h existence
i t iis nott a secret.
t EE.g. bank
b k accountt
statements, personal files etc.

4. Secret data’s existence is a secret. Such data might

include algorithms. It is necessary to monitor & log all
access to secret data.
 WWW – based security
y schemes:-
 Several methods can provide security in the web
framework. These include the following:-

 Secure HTTP(S-HTTP) is a revision of HTTP that will

enable the incorporation of various cryptographic
message formats. Such as DSA & RSA standards.
 Security socket layer (SSL) uses RSA security to wrap
security information around TCP/IP- based protocols.

 SHEN is a security scheme for the web sponsored by

the W3 consortium.
 Top 10 eCommerce Websites in the
World
 Here are some of the top 10 eCommerce
websites in the world that are ruling the e-
commerce platform
platform.
 Taobao
 Amazon
A
 Walmart
 eBay
 Target
 Alibaba
 Flipkart
 NewEgg
 Overstock
 Best Buy
 Taobao is a Chinese online shopping
pp g website,,
headquartered in Hangzhou, China, and owned
by Alibaba.

 Founded by Alibaba Group in 2003.

 Taobao Marketplace facilitates consumer-to-

consumer (C2C) retail by providing a platform for small
businesses and individual entrepreneurs to open online
stores.

 Taobao has over 617 million monthly active users

 Amazon.com,, Inc.,, doing
g business as Amazon,, is an
American electronic commerce and cloud
computing company based in Seattle, Washington.

 Founded by Jeff Bezos on July 5, 1994.

 Walmart Inc. is an
American multinational retail corporation that operates
a chain of hypermarkets, discount department stores,
and grocery stores.
 Headquartered in Bentonville, Arkansas, the company
was founded by Sam Walton in 1962
and incorporated on October 31, 1969.

 Walmart is the world's largest company by revenue—

over US$500 billion, according to Fortune Global 500 list
in 2018
 eBay Inc. is an American multinational e-
commerce corporation based in San Jose, California

 eBay was founded by Pierre Omidyar in 1995

 Alibaba

Founded 4 April 1999; 19 years ago

Hangzhou, Zhejiang, China
Founder Jack Ma
Peng Lei
Headquarters Hangzhou, Zhejiang, China
Area served Worldwide
 Flipkart
p

Founded 2007; 11 years ago

Headquarters Bengaluru, India
Area served India
[1]
Owner Walmart (77%)
Founder(s) Sachin Bansal
Binnyy Bansal
 NewEgg
gg

Industry Computers
Computer hardware
Computer software
Consumer electronics
Consumer (final) goods
Founded 2000; 18 years ago
Founders Fred Chang
Headquarters City of Industry, California, U.S.
Area served Worldwide
 Overstock

Industry Retail
Founded 1997; 21 years ago
Headquarters Midvale, Utah, United States
 Top India
India’s
s Most Popular and Most Visited
Websites
 Flipkart
 SnapDeal
 Myntra
 HomeShop18
 Quikr
 Jabong
 Shopclues
 Trendin
 Amazon