Esseential of Ecommerce introduction to ecommerce.pptx

ecommerce introduction for NEP student

1. ESSENTIALS OF ECOMMERCE UNIT 1

2. INTRODUCTION Electronic Commerce is the process of buying ,selling, transferring products, services, and/or information via computer networks. These business transactions occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer or consumer-to-business.

3. Ecommerce can be defined from the following perspective Communications . From a communications perspective, EC is the delivery of goods, services , information, or payments over computer networks or by any other electronic Commercial (trading). From a commercial perspective, EC provides the capability of buying and selling products, services, and information over the Internet and via other online services . Business process . From a business process perspective, EC is doing business electronically by completing business processes over electronic networks, thereby substituting information for physical business processes

4. Ecommerce can be defined from the following perspective Service . From a service perspective, EC is a tool that addresses the desire of governments, firms, consumers, and management to cut service costs while improving the quality of customer service and increasing the speed of service delivery . Learning . From a learning perspective, EC is an enabler of online training and education in schools, universities, and other organizations, including businesses.

5. Brick-and-mortar : Old-Economy origanizations that perform most of their business off-line, selling physical products by means of physical agents. Virtual(Pure-Play) : Organizations that conduct their business activities solely online. Click-and-mortar(click-and-brick) : Organizations that conduct some ecommerce acitivities ,but do their primary business in the physical world.

6. Ecommerce and Traditional Commerce

7. HIStory of eC 1. The Early Foundations (1960s–1980s) 1960s: Early forms of eCommerce emerged with the development of technologies like Electronic Data Interchange (EDI) and Telecommunications . These allowed businesses to exchange invoices and orders electronically. 1979: British entrepreneur Michael Aldrich invented online shopping by connecting a modified television to a transaction-processing computer using a telephone line. 1982: The first eCommerce platform, CompuServe , was launched, enabling users to purchase products and services online.

8. HIStory of eC The Rise of the Internet (1990s) 1991: The Internet became publicly available, opening up opportunities for commercial use. 1994: The first secure online transaction using encryption technology (SSL) was conducted, laying the groundwork for safer online shopping. 1995: Amazon was launched by Jeff Bezos as an online bookstore. It later expanded to sell almost everything, becoming a global eCommerce giant. eBay , originally called AuctionWeb , was founded by Pierre Omidyar as an online auction site. 1999: The launch of Alibaba , a Chinese eCommerce platform founded by Jack Ma, marked the beginning of global B2B (business-to-business) eCommerce .

9. HIStory of eC Expansion and Innovation (2000s) The 2000s saw rapid growth in eCommerce platforms, driven by improved internet accessibility and consumer trust. 2000: Google launched AdWords , enabling businesses to target potential customers via online advertising. 2005: Amazon introduced Amazon Prime , offering faster delivery and exclusive perks for a subscription fee. 2008: The global adoption of smartphones and the App Store revolutionized eCommerce , allowing mobile commerce ( mCommerce ) to thrive.

10. HIStory of eC Social Commerce and Personalization (2010s) ECommerce integrated with social media platforms like Facebook, Instagram , and Pinterest , enabling social commerce . AI and machine learning began powering personalized shopping experiences , product recommendations, and targeted advertising. 2011: The rise of subscription-based eCommerce (e.g., Birchbox , Dollar Shave Club). 2014: Alibaba’s IPO became the largest in history, signifying the dominance of eCommerce globally.

11. HIStory of eC ECommerce Today (2020s) The COVID-19 pandemic accelerated eCommerce growth, with many businesses shifting operations online. Advancements in logistics (like same-day delivery) and payment systems (e.g., digital wallets, cryptocurrencies ) transformed consumer experiences. Emerging trends include augmented reality (AR) for virtual try-ons, voice commerce via smart assistants, and the rise of sustainability-focused eCommerce .

12. E-Business E-business (electronic business) is the conduct of business processes on the internet. E-Business refers to a broader definition of EC, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, running automated employee services and conducting electronic transaction within the organization.

13. E-commerce and E-Business

14. Significane of ecommerce E-commerce, or electronic commerce, is significant in today's global economy for various reasons. Below are the key aspects of its importance : 1. Global Reach E-commerce allows businesses to transcend geographical boundaries, making products and services accessible to customers worldwide. Small businesses can tap into international markets without the need for physical stores. 2. Convenience and Accessibility Customers can shop anytime and from anywhere, making it highly convenient. It provides 24/7 availability, eliminating the constraints of traditional store hours. 3. Cost Efficiency E-commerce reduces overhead costs such as rent, utilities, and staffing for physical stores. Digital marketing is often more cost-effective than traditional advertising methods.

15. Significane of ecommerce 4. Diverse Product Selection E-commerce platforms can offer a broader range of products compared to physical stores due to unlimited virtual shelf space. Customers can easily compare products and prices across various platforms. 5. Personalization and Customer Experience Data-driven insights allow businesses to provide personalized recommendations and targeted marketing, enhancing the customer experience. Features like reviews, ratings, and chat support improve decision-making for consumers. 6. Business Growth Opportunities E-commerce offers scalability, allowing businesses to expand without significant infrastructure investment. Dropshipping and third-party logistics reduce inventory and supply chain complexities.

16. EDI ( Electronic Data Interchange) EDI stands for Electronic Data Interchange. EDI is an electronic way of transferring business documents in an organization internally, between its various departments or externally with suppliers, customers, or any subsidiaries. In EDI, paper documents are replaced with electronic documents such as word documents, spreadsheets, etc.

17. BENEFITS OR ADVANTAGES OF EC EC provides benefits to organization, individual customers and society. Benefits to the Organization Global reach: EC expands the marketplace to national and international markets. A company can easily locate the best suppliers, more customers and most suitable business partner world wide. Cost reduction: EC decrease the cost of creating, processing ,distributing, storing and retrieving paper-based information Supply chain Improvements: Supply chain efficiencies, such as excessive inventories and delivery delays, can be minimized with EC. Improve Customer relation: EC enables companies to interact more closely with customers. This allows for personalization of communication, products, and services which promotes better CRM and increases customer loyalty. Extended Hours:24/7/365 . The business is open on the Web with no overtime or other extra cost.

18. BENEFITS TO CONSUMERS Ubiquity: EC allows consumers to shop or perform other transactions year round, 24 hours a day, from almost any location. More products and Services: EC provides consumers with more choices; they can select from many vendors and from more products Cheaper Product and Services: EC frequently provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparison. Instant Delivery: In the case of digitized products, EC allows for fast delivery. Participation in Auctions: EC makes it possible for consumers to participate in virtual auctions. These allow sellers to sell things quickly and buyers can locate collectors’ items and bargains.

19. BENEFITS TO SOCIETY Telecommuting: More individuals can work at home and do less travelling for work or shopping, resulting in less traffic on the roads and reduced air pollution Higher standard of Living: Some merchandise can be sold at lower prices, allowing less affluent people to buy more and increase their standard of living Hope for the poor: Because of EC, people in the third world countries and rural areas are now able to enjoy products and services that were unavailable in the past. These include opportunity to learn a skilled profession or earn a college degree. Availability of Public Services: Public services, such as health care, education, and distribution of government social services, can be done at a reduced cost and /or improved quality. Eg. EC provides rural doctors and nurses access to information and technologies with which they can better treat the patients.

20. LIMITATION OF E-COMMERCE Technical limitations Lack of universal standards for quality, security and reliability. The telecommunications bandwidth is sufficient, especially for m-commerce. Software development tools are still evolving. It is difficult to integrate internet and EC software with some existing applications and database. Special Web Servers are needed in addition to the network servers, which add to the cost of EC Internet Accessibility is still expensive and/or inconvenient. Order fulfillment of Large-Scale B2C requires special automated warehouses.

21. LIMITATION OF E-COMMERCE Non-Technical limitations Security and privacy concerns deter customers from buying. Lack of trust in EC and in unknown sellers hinders buying Many legal and public policy issues, including taxation have not yet been resolved. People do not yet trust paperless, faceless transactions. Some Customers like to feel and touch products. Also customers are resistant to the change from shopping. Online fraud is increasing.

22. Impact of ecommerce Global Market Reach: E-commerce allows businesses to access a worldwide audience, breaking geographical barriers. Companies can sell to international customers without needing physical stores, expanding their market opportunities. Consumer Convenience: Customers can shop 24/7 from anywhere, eliminating the need to visit physical stores. This ease of access has changed consumer behavior, prioritizing online shopping for efficiency and time-saving. Reduced Operational Costs: E-commerce reduces expenses for businesses, such as rent, utilities, and physical infrastructure. Automation and digital platforms also help minimize labor costs.

23. Impact of ecommerce Faster and Efficient Delivery: Innovations in logistics, such as same-day delivery and real-time tracking, improve customer satisfaction and increase demand for efficient supply chain management. Job Creation and Transformation: E-commerce has created new job roles in logistics, digital marketing, IT development, and customer service, while also disrupting traditional retail employment patterns. Data-Driven Decision Making: Online platforms collect vast amounts of data on consumer preferences, enabling businesses to analyze trends, personalize offerings, and enhance customer experiences.  

24. Challenges of ECommerce Cybersecurity Threats: Online platforms are vulnerable to hacking, data breaches, and fraud. Protecting sensitive customer information, such as payment details and personal data, is a constant challenge. Logistics and Delivery Issues: Ensuring timely and efficient delivery, especially in remote areas or during peak seasons, can be difficult. Challenges include managing supply chains, dealing with lost packages, and high shipping costs. Customer Trust and Retention: Building trust with customers is critical. Concerns about product quality, payment security, and privacy can deter people from making purchases. Negative reviews or delayed deliveries can damage reputation.

25. Challenges of ECommerce High Competition: The e-commerce space is highly competitive, with businesses vying for customer attention. Companies must invest heavily in marketing, branding, and technology to stay ahead of competitors. Technical Issues and Downtime: Website crashes, slow loading times, or payment gateway failures can lead to loss of sales and frustrated customers. Maintaining a seamless, user-friendly platform is crucial. Returns and Reverse Logistics: Managing product returns can be costly and complicated, especially in industries like fashion. Reverse logistics requires efficient systems to handle returns, refunds, and exchanges without affecting profitability. Digital Divide and Accessibility: Not all potential customers have access to the internet or digital payment systems, especially in developing regions. Limited digital literacy can also hinder certain demographics from using e-commerce platforms effectively.

26. Business Models Business - to - Business (B2B) Business - to - Consumer (B2C) Consumer - to - Consumer (C2C) Business - to - Government (B2G) Government - to - Citizen (G2C)

27. Business - to – Business(B2B) It mainly refers to transactions or business activities between two companies . It involves one company selling products or providing services to another company . In simpler language, a company is another company’s consumer . Eg . If you own a company that sells products or services to another business, then it has a B2B model .

28. Business - to – Business(B2B) A website following the B2B business model sells its products to an intermediate buyer who then sells the product to the final customer. As an example, a wholesaler places an order from a company's website and after receiving the consignment, sells the end-product to the final customer who comes to buy the product at one of its retail outlets.

29. Advantages of B2B Model Stability: Unlike business to customer (B2C) model where businesses and customers keep on their relations from one buyer or seller to the next buyer or seller. On the other hand, B2B (between buyer and seller) is a very stable relationship that goes for years. Loyalty Before signing any contract in the B2B model, buyers and sellers both go at a length to plan their budget, revenues, and rates. When both parties close the deal, then they rely on one another in terms of supplies and payments.

30. Advantages of B2B Model Fewer Expenses In a business to business relationship, both parties spend a lot of time planning and working on the details. Therefore, it leaves no room for mistakes and errors. As a result, everything works out as plan without costing any extra expenses. Easier Calculation Most importantly, you can buy the product or service through online auction at a much lower price. Therefore, it becomes so easier for them to calculate the sales because the figures are based on the facts.

31. Disadvantages of Business to Business Model Fewer Customers In the B2B market, you won’t find a plethora of buyers and sellers just like you see it in the B2C market. Although the market is small with fewer buyers and sellers, but their orders are big. Time Consuming Since the orders of business to business clients are big, and their relations are of a long term in nature. But the process of finding and building with B2B clients is so lengthy that you can’t go and buy products and services just like in the B2C market. Formalities It also involves a lot of formalities like documentation, quotations, negotiations, and meetings. Sometimes, you have to bribe and make under the table deals in order to sign the contracts.

32. Business - to – Consumer(B2C) A website following the B2C business model sells its products directly to a customer. A customer can view the products shown on the website. The customer can choose a product and order the same. The website will then send a notification to the business organization via email and the organization will dispatch the product/goods to the customer.

33. Types of b2c business model 1. Direct Sellers Direct Sellers involve the most common and familiar e-commerce businesses. These are retail sites or stores where consumers buy directly from the seller. Manufacturers and small companies are engaged in direct selling that now introduces their products and services to consumers. For example, a person wishing to buy a Samsung mobile can visit their website directly and order it from there. Other examples involve Zappos , Gap and Target, to name a few. 2. Online Intermediaries Online Intermediary companies are mediators that combine sellers and buyers and do not own the products. These companies, however, establish a platform for connecting buyers with sellers. These are also classified as “go-between” companies or more precisely “intermediary companies” that usually charge a small percentage of profit behind every sale from the respective vendors. Examples are Etsy , Amazon, eBay, Expedia,

34. 3.   Advertising-Oriented Advertising-oriented or advertising-based companies advertise their products or services on their respective platforms with their tremendous reach. These include traffic-driving strategies like content marketing and supposedly selecting the forum that could be the most effective option for advertising the products or services. Through this platform, the businesses thus ensure that numerous people gain knowledge of their products and services and they would click on their advertisements to make a purchase. In this, B2C advertising-based companies charge profit from selling advertising space, while sellers engender revenue by getting their leads converted. Examples include Youtube , and Reddit , amongst others. Such platforms use their sites to advertise the products and services of other companies. 4. Community-Based This category utilizes online communities like Facebook, Instagram , LinkedIn, Twitter, and several other online platforms to assist the companies in marketing their products directly to the consumers. They make the best use of online communities fastened around particular interests and data like demographics and geography to connect website users with their targeted advertisements.

35. Consumer - to – Consumer(C2C) A website following the C2C business model helps consumers to sell their assets like residential property, cars, motorcycles, etc., or rent a room by publishing their information on the website. Website may or may not charge the consumer for its services. Another consumer may opt to buy the product of the first customer by viewing the post/advertisement on the website.

36. Business - to – Employee ( B2E) A Business-to-Employee (B2E) business model refers to a type of business structure in which a company provides services, products, or benefits directly to its employees rather than to customers. Unlike the traditional business-to-consumer (B2C) or business-to-business (B2B) models, B2E focuses on internal operations, employee engagement, and workforce development.

37. Business - to – Employee ( B2E) Here are some examples of B2E practices: Employee Benefits : Companies might offer benefits like health insurance, wellness programs, educational reimbursements, or retirement plans directly to employees. Workplace Services : Businesses may offer services such as on-site daycare, fitness centers, or meal plans to improve the work experience and support employee well-being. Technology and Tools : Providing employees with advanced tools, software, or platforms that help them perform their jobs efficiently is another example of a B2E model. Employee Discounts : Some companies offer discounts on their products or services for their employees, or create exclusive offers for the workforce .

38. Examples of B2E application include Online insurance Policy management Special employee offers Employee benefits reporting

39. Impact of ecommerce on business model 1. Shift from Brick-and-Mortar to Online Impact : Businesses can operate with reduced physical infrastructure, minimizing overhead costs such as rent and utilities. Result : Many traditional retailers are moving to hybrid models or going fully online to reach global audiences. Example : Brands like Warby Parker started online before expanding to physical stores. 2. Expansion of Market Reach Impact : E-commerce allows businesses to target a global audience, breaking geographical boundaries. Result : Companies can scale faster and diversify their customer base. Example : Platforms like Amazon and Alibaba serve customers and businesses worldwide.

40. Impact of ecommerce on business model 3. Data-Driven Decision Making Impact : E-commerce platforms enable businesses to collect and analyze customer data, improving decision-making and personalization. Result : Enhanced customer experience, predictive analytics, and targeted marketing campaigns. Example : Netflix uses customer viewing data to recommend content and guide content creation. 4. New Revenue Streams Impact : E-commerce creates new opportunities, such as subscriptions, freemium models, and affiliate marketing. Result : Businesses diversify their revenue sources beyond traditional product sales. Example : Spotify combines subscription fees with advertising revenue.

41. Impact of ecommerce on business model 5.Reduced Intermediaries Impact : E-commerce enables direct-to-consumer (D2C) sales, bypassing wholesalers and retailers. Result : Higher profit margins, better customer relationships, and control over branding. Example : Brands like Casper and Dollar Shave Club thrive on D2C models. 6.Enhanced Customer Convenience Impact : E-commerce offers 24/7 shopping, home delivery, and easy returns, making the customer journey seamless. Result : Increased customer satisfaction and loyalty. Example : Amazon Prime’s fast delivery and easy returns are key drivers of its success.

42. Impact of ecommerce on business model 7.Shift in Marketing Strategies Impact : Businesses focus on digital marketing, including social media, SEO, and influencer marketing, to attract customers. Result : Cost-effective marketing with better tracking of ROI. Example : Small brands use Instagram or TikTok ads to drive sales.

43. E-Government and e-governance By E-Government we mean the use of ICT in government operations, as a tool to increase the outreach of the government services. E-Government on the other hand, implies the use of ICT in transforming and supporting functions and structures of the system E-Government is a system. While E-governance is a function E-Government is a one-way communication protocol. On the contrary , E-Governance is a two-way communication Protocol. E-Government is sometimes defined as Electronic Delivery of Government services whereas E-Governance is sometimes defined as electronic service delivery, plus consultation of citizens and e-democracy.

44. Supply Chain management In an organization, if a product is manufactured using raw materials from various suppliers and if these products are sold to customers, a supply chain is created. Depending on the size of the organization and the number of products that are manufactured, a supply chain may be complex or simple. “Supply Chain Management refers to the management of an interconnected network of businesses involved in the ultimate delivery of goods and services to customers”. It entails the storage and transport of raw materials, the process of inventory and the storage and transportation of the final goods from the point of manufacture to the point of consumption.

45. Supply Chain Management (SCM) Supply Chain Management(SCM) is the process and activity of sourcing the raw materials or components an enterprise needs to create a product or service and deliver that product to customers.

46. Supply Chain Management (SCM) The goal of SCM software is to improve supply chain performance timely and accurately Supply chain information allows manufacturers to make and ship only as much product as can be sold. Effective supply chain systems help both manufacturers and retails reduce excess inventory.