e-commerce

e- commerce is a useful for every person because by e commerce time saving

1. Unit-1

2. Definition of E-Commerce
Electronic Commerce (EC) is where business
transactions take place via telecommunications
networks, especially the Internet.
Electronic commerce describes the buying and selling
of products, services, and information via computer
networks including the Internet.
The infrastructure for EC is a networked computing
environment in business, home, and government.
E-Business describes the broadest definition of EC. It
includes customer service and intra business tasks. It is
frequently used interchangeably with EC.

3. E-commerce
E-Commerce or modern Electronics Commerce is a
methodology of business which addresses the need of
business organizations, vendors and customers to reduce
cost and improve the quality of goods and services while
increasing the speed of delivery. E-commerce refers to
paperless exchange of business information using
following ways.
Electronic Data Exchange (EDI)
Electronic Mail (e-mail)
Electronic Bulletin Boards
Electronic Fund Transfer (EFT)
Other Network-based technologies

4. Electronic Commerce
Electronic commerce (e-commerce)
4

5. Electronic Commerce under different perspectives:
 Communications Perspective
EC is the delivery of information, products /services, or payments over the
telephone lines, computer networks or any other electronic means.
 Business Process Perspective
EC is the application of technology toward the automation of business
transactions and work flow.
 Service Perspective
EC is a tool that addresses the desire of firms, consumers, and management to
cut service costs while improving the quality of goods and increasing the speed
of service delivery.
 Online Perspective
EC provides the capability of buying and selling products and information on
the internet and other online services.

6. Features of E-Commerce
Non-Cash Payment: E-Commerce enables use of credit cards, debit cards,
smart cards, electronic fund transfer via bank's website and other modes of
electronics payment.
24x7 Service availability: E-commerce automates business of enterprises and
services provided by them to customers are available anytime, anywhere. Here
24x7 refers to 24 hours of each seven days of a week.
Advertising / Marketing: E-commerce increases the reach of advertising of
products and services of businesses. It helps in better marketing management
of products / services.
Improved Sales: Using E-Commerce, orders for the products can be
generated any time, any where without any human intervention. By this way,
dependencies to buy a product reduce at large and sales increases.
Support: E-Commerce provides various ways to provide pre sales and post
sales assistance to provide better services to customers.
Inventory Management: Using E-Commerce, inventory management of
products becomes automated. Reports get generated instantly when required.
Product inventory management becomes very efficient and easy to maintain.
Communication improvement: E-Commerce provides ways for faster,
efficient, reliable communication with customers and partners.

7. Traditional Commerce v/s E-Commerce
Traditional Commerce E-Commerce
Heavy dependency on
information exchange from
person to person.
Communication/ transaction
are done in synchronous
way. Manual intervention is
required for each
Communication or
transaction.
Information sharing is made easy
via electronic communication
channels making little
dependency on person to person
information exchange.
Communication or transaction
can be done in asynchronous
way. Electronics system
automatically handles when to
pass communication to required
person or do the transactions.

8. Traditional Commerce v/s E-Commerce
Traditional Commerce
E-Commerce
It is difficult to establish and
maintain standard practices
in traditional commerce
Communications of business
depends upon individual
skills.
Unavailability of a uniform
platform as traditional
commerce depends heavily
on personal communication.
No uniform platform for
information sharing as it
depends heavily on personal
communication.
A uniform strategy can be
easily established and
maintain in e-commerce
In e-Commerce or Electronic
Market, there is no human
intervention.
E-Commerce website
provides user a platform
where al l information is
available at one place.
E-Commerce provides a
universal platform to support
commercial / business
activities across the g lobe.

9. Pure Vs. Partial Electronic
Commerce
Three dimensions
the product (service) sold [physical / digital];
the process [physical / digital]
the delivery agent (or intermediary) [physical / digital]
Traditional commerce
all dimensions are physical
Pure EC
all dimensions are digital
Partial EC
all other possibilities include a mix of digital and physical
dimensions

10. 10
Elements of Commerce
You need a Product or service to sell
You need a Place from which to sell the
products
You need to figure out a way to get people to
come to your place.
You need a way to accept orders.
You also need a way to accept money.
You need a way to deliver the product or
service, often known as fulfillment.
Sometimes customers do not like what they
buy, so you need a way to accept returns.
You need a customer service and technical
support department to assist customers with
products.

11. SCOPE OF E-COMMERCE
Selling can be focussed to the global customer
Pre-sales, subcontracts, supply
Financing and insurance
Commercial transactions: ordering, delivery, payment
Product service and maintenance
Co-operative product development
Distributed co-operative working
Use of public and private services
Business-to-administrations (e.g. customs, etc)
Transport and logistics
Public procurement
Automatic trading of digital goods
Accounting
Dispute resolution

12. E-COMMERCE ADVANTAGES
E-Commerce advantages can be broadly classified in
three major categories:
Advantages to Organizations
Advantages to Consumers
Advantages to Society

13. Advantages to Organizations
Using E-Commerce, organization can expand their market to
national and international markets with minimum capital
investment. An organization can easily locate more customers,
best suppliers and suitable business partners across the globe.
E-Commerce helps organization to reduce the cost to create
process, distribute, retrieve and manage the paper based
information by digitizing the information.
E-commerce improves the brand image of the company.
E-commerce helps organization to provide better customer
services.
E-Commerce helps to simplify the business processes and make
them faster and efficient.
E-Commerce reduces paper work a lot.
E-Commerce increased the productivity of the organization. It
supports "pull" type supply management. In "pull" type supply
management, a business process starts when a request comes
from a customer and it uses just-in-time manufacturing way.

14. Advantages to Customers
24x7 support. Customer can do transactions for the product or
enquiry about any product/services provided by a company any time,
any where from any location. Here 24x7 refers to 24 hours of each
seven days of a week.
E-Commerce application provides user more options and quicker
delivery of products.
E-Commerce application provides user more options to compare and
select the cheaper and better option.
A customer can put review comments about a product and can see
what others are buying or see the review comments of other
customers before making a final buy.
E-Commerce provides option of virtual auctions.
Readily available information. A customer can see the relevant
detailed information within seconds rather than waiting for days or
weeks.
E-Commerce increases competition among the organizations and as
result organizations provides substantial discounts to customers.

15. Advantages to Society
Customers need not to travel to shop a product thus
less traffic on road and low air pollution.
E-Commerce helps reducing cost of products so less
affluent people can also afford the products.
E-Commerce has enabled access to services and
products to rural areas as well which are otherwise
not available to them.
E-Commerce helps government to deliver public
services like health care, education, social services at
reduced cost and in improved way.

16. Disadvantages of E-Commerce
E-Commerce disadvantages can be broadly classified in
two major categories:
Technical disadvantages
Non-Technical disadvantages

17. Technical Disadvantages
There can be lack of system security, reliability or standards
owing to poor implementation of e-Commerce.
Software development industry is still evolving and keeps
changing rapidly.
In many countries, network bandwidth might cause an issue as
there is insufficient telecommunication bandwidth available.
Special types of web server or other software might be required
by the vendor setting the e-commerce environment apart from
network servers.
Sometimes, it becomes difficult to integrate E-Commerce
software or website with the existing application or databases.
There could be software/hardware compatibility issue as some
E-Commerce software may be incompatible with some
operating system or any other component.

18. Non-Technical Disadvantages
Initial cost: The cost of creating / building E-Commerce
application in-house may be very high. There could be
delay in launching the E-Commerce application due to
mistakes, lack of experience.
User resistance: User may not trust the site being
unknown faceless seller. Such mistrust makes it difficult to
make user switch from physical stores to online/virtual
stores.
Security/ Privacy: Difficult to ensure security or privacy on
online transactions.
Lack of touch or feel of products during online shopping.
E-Commerce applications are still evolving and changing
rapidly.
Internet access is still not cheaper and is inconvenient to
use for many potential customers like one living in remote
villages.

19. Basic Benefits of E-Commerce
The major benefits are increasing sales and
decreasing costs. The other benefits are as follows:
1. Increased accessibility to customers
i) Allows people to carry out operations without
barriers of time i.e. 24 hours a day, seven days a week.
ii) To reach out to global consumers easily and is also
cost effective.
iii) It helps business to reach out new markets.
iv) Consumers and suppliers can be directly
approached over the Internet.
v) Acquisition of new consumers over the internet is
considerably cheaper..

20. 2. Convenience of making comparisons:
E-commerce helps consumers to make comparisons
while shopping . Automated online shopping
assistants called hopbots score are available to find
deals on anything from flowers to perfume

21. 3. Increased Profitability
i) The direct cost to sale for an order taken from an
web site is lower as compared to traditional means.
Moreover processing errors are virtually eliminated in
e-selling besides being faster and more convenient to
visitor.
ii) It provides the solution by decimating the costs,
which are incurred.

22. 4. Innovation:
E-commerce enables business organization to create new products or
services.
5.Improvement in consumer service:
There is a direct benefit in improvement of consumer service. High
levels of customer satisfaction generate increased sales and increased
profits.
6. Tangible advantages:
From the buyer’s perspective e-commerce provides a lot of tangible
advantages:
i. Reduction in buyers sorting out time
ii Better buyer decisions.
iii.Less time spent in resolving invoice and order discrepencies.
iv. Increased opportunities for buying alternative products.

23. 7. Stratergic Benefits:
It helps to reduce delivery time,labour cost and also the
cost incurred in the following areas:
i) Document prepration.
ii) Error detection and correction.
iii) Reconciliation.
iv) Mail Prepration.
v) Telephone calling.
vi) Data Entry.
vii)Overtime.
viii)Supervision Expenses.

24. DRIVING FORCES OF E-COMMERCE
Environmental factors that create Business Pressures:
Economic Forces
Market Forces
Technology Forces
Societal and environmental forces

25. Lower marketing costs: marketing on the Internet maybe cheaper and can
reach a wider crowd than the normal marketing medium.
Lower sales costs: increase in the customer volume do not need an increase
in staff as the sales function is housed in the computer and has virtually
unlimited accessibility
Lower ordering processing cost: online ordering can be automated with
checks to ensure that orders are correct before accepting, thus reducing
errors and the cost of correcting them.
New sales opportunities: the website is accessible all the time and reaches
the global audience which is not possible with traditional storefront.
Economic Forces

26. Market Forces
Strong competition between organizations,
extremely low labor cost in some countries,
frequent and significant changes in markets and
increased power of consumers

27. Technology Forces
The development of information and communications technology (ICT) is a
key factor in the growth of ecommerce.
This in turn has made communication more efficient, faster, easier, and
more economical as the need to set up separate networks for telephone
services, television broadcast, cable television, and Internet access is
eliminated.
From the standpoint of firms/ businesses and consumers, having only one
information provider means lower communications costs.

28. Societal and environmental
forces
Changing nature of workforce
Government deregulations
Shrinking government subsidies
Increased importance of ethical and legal issues
Increased social responsibility of organizations
Rapid political changes

29. Major Business Pressures
Market and
economic pressures
Strong competition
Global economy
Regional trade agreements (e.g. NAFTA)
Extremely low labor cost in some countries
Frequent and significant changes in markets
Increased power of consumers
Societal and
environmental pressures
Changing nature of workforce
Government deregulation of banking and other services
Shrinking government budgets subsides
Increased importance of ethical and legal issues
Increased social responsibility of organizations
Rapid political changes
Technological pressures Rapid technological obsolescence
Increase innovations and new technologies
Information overload
Rapid decline in technology cost Vs. performance ratio

30. 30
Physical
agent
Digital
agent
Digital
Product
Physical
Product Physical process
Digital process
Virtual process
Virtual delivery agent
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Electronic
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The core of
electronic commerce
Traditional
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31. 31
Figure shows that the EC applications are supported
by infrastructures, and their implementation is
dependent on four major areas (shown as supporting
pillars) people, public policy, technical standards and
protocols, and other organizations.
The EC management coordinates the applications,
infrastructures, and pillars. It also includes Internet
marketing and advertisement.
The Electronic Commerce Field

32. A Framework for Electronic Commerce
9
Electronic Commerce Applications
• Stocks Jobs • On-line banking
• Procurement and purchasing• Malls • On-line marketing and advertising
• Home shopping • Auctions • Travel • On-line publishing
People:
Buyers, sellers,
intermediaries,
services, IS people,
and management
Public
policy,
legal, and
privacy
issues
Technical standards
for documents,
security, and
network protocols
payment
Organizations:
Partners,
competitors,
associations,
government services
Infrastructure
(1)
Common business
services infrastructure
(security smart
cards/authentication
electronic payment,
directories/catalogs)
(2)
Messaging and
information distribution
infrastructure
(EDI, e-mail, Hyper Text
Transfer Protocol)
(3)
Multimedia content
and network
publishing infrastructure
(HTML, JAVA, World
Wide Web, VRML)
(4)
Network infrastructure
(Telecom, cable TV
wireless, Internet)
(VAN, WAN, LAN,
Intranet, Extranet)
(5)
Interfacing
infrastructure
(The databases,
customers, and
applications)
Management
© Prentice Hall, 2000

33. Impact of e-commerce
e-commerce will eliminate mediation process as
producers can sell direct to consumers.
firms will have fast knowledge of what customers
want.
Firms can use this knowledge to guide the
development of their product lines and to identify new
growth areas at their earlier stages.
e-commerce will also help small- and medium-sized
enterprises (SMIs) to gain greater market reach for
their products and services.

34. Impact of e-commerce
In fact, e-commerce can be an efficient and economical
way for many SMIs to enter an export market.
E-commerce offers consumers a wide range of new
opportunities to do direct shopping and banking using
the convenience of a home computer or other
communication devices.
Consumers will also benefit in terms of lower final
prices due to lower transaction costs as described
above.
e-commerce consumers will have a wider and direct
access to producers of goods and services without
intermediaries.

35. Impact of e-commerce
With a wider choice of products and services offered to
them, they can cast their preferences by describing
what they want.
 In this environment, e-commerce will hasten the shift
of market power of consumers, from a "product taker"
to a "product maker".
 As a result, this process will lead to greater
competition among firms to protect their market
share.
e-commerce will result in higher investment by the
Government, firms and consumers.

36. Impact of e-commerce
 Coupled with higher investment in IT, e-commerce
will result in higher efficiency and productivity of the
economy.
e-commerce will contribute to higher total factor
productivity of the Malaysian economy which is
needed to sustain economic growth in the long term.
E-commerce will create new activities and a variety of
new industries which utilize IT.
This will lead to the creation of new job opportunities.

37. Brief History
Early 1970s saw introduction of Electronic Fund Transfers (EFT)
Limited to large organizations, financial institutions, few daring
small business
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
to include other transaction processes besides financial; included
manufacturers, retailers, services, etc
1990s- the World Wide Web on the Internet provides easy to use
technology for information publishing and dissemination
Cheaper to do business (economics of scale)
Enable diverse business activities (economics of scope)
Between 1997 and 2000, more than 12000 Internet-related
business were started

38. Copyright © 2010 Pearson
Education, Inc.
E-commerce: A Brief History
1995–2000: Innovation
Key concepts developed
Dot-coms; heavy venture capital investment
2001–2006: Consolidation
Emphasis on business-driven approach
2006–Present: Reinvention
Extension of technologies
New models based on user-generated content, social
networking, services
Slide 1-38

39. E-commerce infrastructure
Information superhighway infrastructure
Internet, LAN, WAN, routers, etc
Telecom, cable TV, wireless, etc
Messaging and information distribution infrastructure
HTML, XML, email, HTP, etc
Common business infrastructure
Security, authentication, electronic payment, directories
catalogs, etc
Web architecture
Client/server model
N-tier architecture; e.g. web servers, application servers,
database servers, scalabilty

40. The process of e-commerce
Attract customers
Advertising, marketing
Internet with customers
Catalog, negotiation
Handle and manage orders
Order capture
Payment
Transaction
Fulfillment (physical good, service good, digital good)
React to customer inquiries
Customers service
Order tracking

41. 41
Buyer and Seller Roles In
Commerce