UNIT- III E-Commerce

TOPICS TO BE COVER…..

• E-commerce: Meaning, Difference between e-

commerce and e-business
• Technological Building Blocks Underlying E-commerce
• Major Trends in E-commerce
• Conceptual Framework of E-Commerce
TOPICS TO BE COVER…..

• Unique Features of E-commerce Technology

• Emergence of E-Commerce on Private Networks
• Forces Effecting E-Commerce
• Types of E-Commerce
• Legal and security issues in E-commerce
 Worth watching
video

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E-COMMERCE

Preliminary definition :
E-Commerce enables the comprehensive digital
execution of business processes between suppliers
and their customers via global public and private
networks.
E-COMMERCE

E-Commerce is the exchange of goods and services

between (usually) independent organizations and/or
persons supported by a comprehensive usage of
powerful ICT systems and a globally standardized
network infrastructure.
E-COMMERCE WITH THE “5-C-MODEL”
Commerce
Collaboration
Communication
Connection
Computation
 ADVANTAGES OF E-COMMERCE
…for the customer …for the provider
• Flexible shopping hours • Better customer service can be
• No waiting queues offered
• Shopping at home • Fast communication with customer
• Individual needs can be covered • New customer potential through
• Global offers, more competition, global visibility
pressure on prices • No (traditional) intermediaries, who
take away margins
DISADVANTAGES OF E-COMMERCE
…for the customer … for the provider
 Security risks:  Higher logistics cost
Data theft
Anonymity of customers



 Identity theft
 Abuse
 Crime:
 Bogus firm OR Fraud
 Uncertain legal status
DIFFERENCE BETWEEN E-COMMERCE AND E-BUSINESS
BASIS FOR COMPARISON E-COMMERCE E-BUSINESS

Meaning Trading of merchandise, over the Running business using the internet is
internet is known as E-commerce. known as E-business.
What is it? Subset Superset

Is it limited to monetary transactions? Yes No

What they carry out? Commercial transactions Business transactions

Approach Extroverted Ambivert

Requires Website Website, CRM, ERP, etc.

Which network is used? Internet Internet, Intranet and Extranet.

 BRIEF HISTORY
1970s: Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over
secured networks
Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-
commerce within companies
Used by businesses to transmit data from one business to another
1990s: the World Wide Web on the Internet provides easy-to-use
technology for information publishing and dissemination
Cheaper to do business (economies of scale)
Enable diverse business activities (economies of scope)
12
TECHNOLOGICAL BUILDING BLOCKS UNDERLYING E-COMMERCE
Internet
World Wide Web
 HTML
 Deep Web vs. “surface” Web

Mobile platform
 Mobile apps

The mobile platform provides the ability to access the Internet from a variety of mobile
devices such as smartphones, tablets, and other ultra-lightweight laptop computers via
wireless networks or cell phone service.
TECHNOLOGICAL BUILDING BLOCKS UNDERLYING E-COMMERCE (DEEP WEB
VS. “SURFACE” WEB)

Deep Web is reportedly 500 to 1,000 times greater than the surface Web. The
deep Web contains databases and other content that is not routinely indexed
by search engines such as Google.
TECHNOLOGICAL BUILDING BLOCKS UNDERLYING
E-COMMERCE (INTERNET ACCESS IN THE UNITED STATES, 2016)
 Over 80% of all
Internet users in the
United States (217
million people) go
online using both a
desktop/laptop and
mobile device.
 Almost 12% (31
million) only go online
by using a mobile
device.
 Just over 7% (19
million) use only a
desktop or laptop
computer to access the
SOURCE: Based on data from eMarketer, Inc., 2016c. Internet.
CLASS DISCUSSION

What are the advantages and disadvantages of apps,

compared with websites, for mobile users?
What are the benefits of apps for content owners and
creators?
Will apps eventually make the Web irrelevant? Why or
why not?
 What are the advantages and disadvantages of apps,
compared with websites, for mobile users?
Criteria Responsive/Mobile Website Mobile App
Compatibility Displays equally well on all types of Requires development of separate
devices version for each platform

Reach Reaches wider audience; covers all Accessible for smartphone and
devices (mobile, desktop, laptop) tablet users only

Working Offline Limited offline functionality Works well offline

Ongoing Maintenance Supporting and updating across all Requires extra time and cost for
mobile devices is easier; flexible; regular updating, including time for
requires less effort approval from app markets
Convenience Provides limited convenience due to Provides better experience in
screen size and inability to keep all regular use; loads content faster;
needed info on one page has push notifications
Personalization Provides average opportunities to Provides wider options for
personalize settings personalization
BENEFITS OF APPS FOR CONTENT OWNERS
AND CREATORS?
You get information (both when there is an internet connection and when it's offline due to
background processes) about your consumers and you can discover their preferences and
behaviours.
The analytical value of this information is amazing for a person with the knowledge to
analyze and use this information.
Furthermore app users are more loyal and will be reminded of your app more than they
would be reminded of your website after using it.
Downloading an app already means that there is some sort of investment into the app that
you simply can't get with a website.
For a creator an application will feel more important than a website (due to time investment)
and will feel more connected with his product/application
 Will apps eventually make the Web irrelevant? Why
or why not?
Web will not be made obsolete due to the popularity of apps.

Apps and the Web will co-exist together and will simply be attractive to different types of customers.

The vastness of the Web can't be replicated by apps right now, There is a possibility to create apps for example

looking up information, buying things, playing games, ... But the usage of apps does limit your possibilities.

The Web allows you to use every possible site for it, once you download an app you're more inclined to get

information through this single app as it seems impractical to download multiple apps that basically have the

same functionality.

This would overload your phone memory and it would be less efficient than simply using the Web as this gives

you many more choices with less effort.

UNIQUE FEATURES OF E- • E-commerce technologies
COMMERCE TECHNOLOGY provide 8 unique features
that have impacted the
conduct of business.
• These unique dimensions of
e-commerce technologies
suggest many new
possibilities for marketing
and selling—a powerful
set of interactive,
personalized, and rich
messages are available for
delivery to segmented,
targeted audiences.
 UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

1. Ubiquity:
 Marketspace is virtual (migration from marketplace to marketspace).
 Transaction costs reduced (the costs of participating in a market).
 Example: being able to surf the web on your mobile device while riding a bus
or train.
 Available just about everywhere, at all times.

2. Global reach
a. Transactions cross cultural and national boundaries.
b. The potential market size for e-commerce merchants is roughly equal to
the size of the world’s online population.
 UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY
3. Universal standards:
 Standards that are shared by all nations around the world.
 lower market entry costs—the cost merchants must pay just to bring their goods to
market.
 Reduce search costs—the effort required to find suitable products.
 Price discovery becomes simpler, faster, and more accurate.
 Possible to easily find many of the suppliers, prices, and delivery terms of a
specific product anywhere in the world
4. Information richness
 Refers to the complexity and content of a message.
 Supports video, audio, and text messages.
 Are interactive and can adjust the message to individual users.
UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY
5. Interactivity
 Technology that allows for two-way communication between merchant and
consumer and among consumers.
 Interactivity allows an online merchant to engage a consumer in ways like a
face-to-face experience.
 Comment features, community forums, and social networks with social sharing
functionality such as Like and Share buttons all enable consumers to actively
interact with merchants and other users.
 Example: using a chat window to interact with technical support at a
merchant’s website.
 UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY
6. Information density

The total amount and quality of information available to all market participants,
consumers and merchants alike.
Information becomes more plentiful, less expensive, and of higher quality.
Reduction in information asymmetry among market participants (consumers and
merchants).
More price transparency: the ease with which consumers can find out the variety of
prices in a market.
More cost transparency: the ability of consumers to discover the actual costs
merchants pay for products.
Allows for greater market segmentation and price discrimination: selling the same
goods, or nearly the same goods, to different targeted groups at different prices.
 UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY
7. Personalization/customization
Personalization: merchants can target their marketing messages to specific individuals
by adjusting the message to a person’s name, interests, and past purchases.
Customization: changing the delivered product or service based on a user’s
preferences or prior behavior.
A result of increased information density.

8. Social technology
Much more social by allowing users to create and share content with a worldwide
community.
E-commerce technologies provide a unique, many-to-many model of mass
communication.
CONCEPTUAL FRAMEWORK OF E-COMMERCE

-
- Common business service
infrastructure
Public Policy Technical Standard for
- Messaging & Information documents,
& legal Privacy Issues
Distribution System
Security &
-Multimedia content &
Network Publishing System Network protocol
- Network Infrastructure
 ESSENTIAL E-COMMERCE PROCESSES
Access Control & Security

• Access control
• Authentication
• Security measures

Profiling & Personalizing

• Profile management & personalizing

• Behavior tracking

Catalog Management

• Pricing calculation
• Product configuration
• Catalog generation
 ESSENTIAL E-COMMERCE PROCESSES
Search Management

• Content-based search
• Parametric-based search
• Rule-based search

Workflow Management

• Buying process automation

• Document management
• Rule & role-based content routing

Payment

• Shopping cart
• Payment method support
• Payment verification

Content Management

• Dynamic content generation

• Data repository
 Web Hosting
• Domain Name Services
• Storage and Backup
• Server Speed and Reliability
• Management Information & Security
• Technical Support & Advanced Solutions

E-BUSINESS • Pricing

Selecting an Internet Service Provider

INFRASTRUCTURE • Location
REQUIREMENTS • Price
• Internet Tool Kit
Internet Security
• Internet Security Software
• Anti-Virus Software
• Firewall
 Privacy Policy
• Legal statement
• Data sharing
• Log files
• Email addresses
E-BUSINESS Broadband Internet Access
INFRASTRUCTURE • Narrowband
REQUIREMENTS •
•
ISDN (Integrated Services Digital Network)
Broadband
• Faster Uploads and Downloads
• Affordability
• Speed
• Constant Internet Access
• Reliability
FORCES AFFECTING E-COMMERCE
Political

Factors
Technolo
gical affecting e- Economic
commerce

Social
 MODEL FOR E-
COMMERCE TRANSACTIONS/ TYPES OF
E-COMMERCE

E-commerce transactions can be modeled by identifying the partners

directly involved in the transactions. This is the most convenient and
useful way of building models for e-commerce transactions. Some
significant models are as follows:

•Business-to-Business (B2B)
•Business-to-consumer (B-to-C)
•Business-to-Government (B-to-G)
•Consumer-to-Consumer (C-to-C)
•Consumer-to-Government (C2G)
•Consumer-to-Business (C-to-B)
BUSINESS-TO-BUSINESS E-COMMERCE
(B2B)
It is companies buying from and selling to each other online. But there's more to it than
purchasing. It's evolved to encompass supply chain management as more companies
outsource parts of their supply chain to their trading partners. Business- to-
business commerce includes a broad range of intercompany transactions, including
wholesale trade as well as company purchases of services, resources, technology,
manufactured parts and components, and capital equipment.

Examples: Intel selling microprocessor to Dell. Heinz selling ketchup to McDonalds.

• It is defined as the exchange of
products, information or services between
business and consumers in a retailing relationship.
Some of the first examples of B-to-C e-
commerce were amazon.com and dell.com in the
USA and lastminute.com in the UK. In this
case, the ‘C’ represents either consumer
or customer. The B2C model involves transactions
between business organizations and consumers.

BUSINESS-TO-CONSUMER (B-TO-C)
The major B2C e-commerce reduces transactions costs.
benefits of
B2C are as
follows:
Model the cost of the product is reduced
as we can eliminate the middle men.

Major thing in B2c model is customer care.

Pre- Check for digital certificates of the site and

Cautions it hacker free.
of B2C E-
commerce: Check for shipping price.

See the previous service going through

the reviews of the old customers
Purchasing with the appropriate cards.
 • It is the exchange of information, services and
products between business organizations and
government agencies on-line. It refers to the use
BUSINESS-TO- of the Internet for public procurement, licensing
procedures, and other government- related
GOVERNMENT operations. This may include:

(B-TO-G) • E-procurement services

• A virtual workplace
• Rental of on-line applications
and databases
 CONSUMER-TO-
CONSUMER (C-TO-C)
In this category consumers interact directly with
other consumers. C2C is simply commerce
between private individuals or consumers. They
exchange information such as:

• Expert knowledge
• Opinions
 CONSUMER-TO-GOVERNMENT
(C2G) MODEL
• In this model, an individual consumer interacts with the
government. For example, a consumer can pay his
income tax or house tax online. The transactions
involved in this case are C2G transactions. Examples
where consumers provide services to government have
yet to be implemented. It is not that popular approach
and is quite rare. A possible example could be when a
hacker is offering his services to the government for
defense against cyber terrorism.
 CONSUMER-TO-BUSINESS
(C-TO-B)
• This is the exchange of
products, information or services from
individuals to business. A classic
example of this would be individuals
selling their services to businesses.
Consumer-to- business (C2B)
transactions involve reverse auctions,
which empower the consumer to drive
transactions.
 LEGAL ISSUES IN E-COMMERCE

1. Incorporation Problem

2. Trademark Security Problem

3. Copyright Protection Issue

4. Transaction Issue
 SECURITY ISSUES IN E-COMMERCE

1. Privacy

2. Integrity

3. Authentication

4. Non-repudiation
 1. Online Sales Growth is Unstoppable

2. The Future of Ecommerce After COVID-19

3. Mobile Shopping is Growing

4. Young Consumers To Change the Business Landscape

MAJOR TRENDS 5. Evolving Role of Social Media in Ecommerce
IN E-COMMERCE 6. Environmental Topics Influence Buyers

7. The Desire To Shop With Independent Businesses

8. Augmented Reality Transforms How We Shop

9. Personalization is the Future

10. Visual Commerce Is on the Rise

 QUESTION FOR DISCUSSION
1. Think that you run an online shop. How can you make sure that the
customer, just placing an order, is real customer, will accept the delivery
and then pay the invoices?

2. Think that you are selling chocolates in local area, now you want to
increase your selling and thought to opt for website development and
apps. What process you need to follow and what factors affect the
decisions?
3. If you are owner of online shop, you can decide whether your customer
have to pay after delivery by a money transfer via bank account to
your bank account or by credit card? Which method would you select?
Why?