Introduction to E-Commerce.pdf

This presentation will cover the basic introduction of E-Commerce and various types of E-Commerce. It will also cover the architectural framework of E-Commerce.

1. I
NTRODUCTIONTO
E-C
OMMERCE
By Kush Bhushanwar

2. WHAT IS COMMERCE

AccordingtoDictionary.com,Commerceisa
divisionoftradeorproductionwhichdealswith
theexchangeofgoodsandservicesfromproducer
tofinalconsumer.

Itcomprisesthetradingofsomethingofeconomic

Itcomprisesthetradingofsomethingofeconomic
valuesuchasgoods,services,information,or
moneybetweentwoormoreentities.

3. WHAT IS E-COMMERCE

CommonlyknownasElectronicMarketing.

“Itconsistofbuyingandsellinggoodsand
servicesoveranelectronicsystemsSuchasthe
internetandothercomputernetworks.”

“E-commerceisthepurchasing,sellingand

“E-commerceisthepurchasing,sellingand
exchanginggoodsandservicesovercomputer
networks(internet)throughwhichtransactionor
termsofsaleareperformedElectronically.

4. T
RADITIONAL
B
USINESS
D
IRECT
S
ELLING

5. Why
Use
E-Commerce?

6. 
Low Entry Cost

Reduces Transaction Costs

Access To The Global Market

Secure Market Share

7. Brief History
Of
E-CommerceE-Commerce

8. 
1970s:ElectronicFundsTransfer(EFT)

Usedbythebankingindustrytoexchange
accountinformationoversecurednetworks

Late1970sandearly1980s:Electronic
DataInterchange(EDI)fore-commerce
withincompanies

Usedbybusinessestotransmitdatafromone
businesstoanother

1990s:theWorldWideWebonthe
Internetprovideseasy-to-usetechnology
forinformationpublishingand
dissemination

Cheapertodobusiness(economiesofscale)

Enablediversebusinessactivities(economies
ofscope)

9. THE PROCESS
OF
E-COMMERCEE-COMMERCE

10. 
AconsumerusesWebbrowsertoconnect
tothehomepageofamerchant'sWebsite
ontheInternet.

Theconsumerbrowsesthecatalogof
productsfeaturedonthesiteandselects
itemstopurchase.

Theselecteditemsareplacedinthe

Theselecteditemsareplacedinthe
electronicequivalentofashoppingcart.

Whentheconsumerisreadytocomplete
thepurchaseofselecteditems,she
providesabill-toandship-toaddressfor
purchaseanddelivery

11. 
Whenthemerchant'sWebserverreceives
thisinformation,itcomputesthetotalcost
oftheorder--includingtax,shipping,and
handlingcharges--andthendisplaysthe
totaltothecustomer.

Thecustomercannowprovidepayment
information,suchasacreditcardnumber,
andthensubmittheorder.andthensubmittheorder.

12. 
Whenthecreditcardnumberisvalidated
andtheorderiscompletedatthe
CommerceServersite,themerchant'ssite
displaysareceiptconfirmingthe
customer'spurchase.

TheCommerceServersitethenforwards
theordertoaProcessingNetworkfor
paymentprocessingandfulfillment.paymentprocessingandfulfillment.

13. E-C
OMMERCE
O
RGANIZATION

AnE-CommerceOrganizationalunitisthe
organizationalstructurewithwhichacompany
operatesitsonlinebusiness.

Thebasicparametersandrequirementsforthis
organizationalunitareusuallydefinedwithinorganizationalunitareusuallydefinedwithin
theframeworkofanE-Commercedistribution
strategyortheindividualchannelstrategies.

RegardlessofwhichofthethreeE-Commerce
pillars(OnlineMarketplaces,ThirdParty
eRetailers,DirectSales&Affiliates)areactively
beingpursuedbyacompany,certainbasicrules
existforensuringhighperformance.

14. E-C
OMMERCE
O
RGANIZATIONALUNIT

16. A
RCHITECTURAL
F
RAMEWORK

17. A
PPLICATION
S
ERVICES

Thislayercomprisesofexistingand
futureapplications.

Threedistinctclassesofecommerce
applicationsare:

Consumertobusiness

Businesstoconsumer

Intraorganization

18. B
ROKERAGEAND
D
ATA
M
ANAGEMENT

Thislayerprovidesserviceintegration
throughinformationbrokerages.

Informationbrokeragesrepresentsan
intermediarywhoprovidesservice
integrationbetweencustomersand
informationproviders.

Animportantaspectofthebrokerage
functionisthesupportfordata
management.

19. I
NTERFACE
A
ND
S
UPPORT
S
ERVICES

Thislayerprovidesinterfacesfor
ecommerceapplicationssuchas
interactivecatalogsandfunctions
necessaryforinformationsearchvia
directories.directories.

Interactivecatalogsarecustomized
interfacetocustomerapplicationslike
homeshopping.

Directoriesorganizeenormousamountof
informationandtransactionsgeneratedto
facilitateecommerce.

20. S
ECURE
M
ESSAGING

E-messagingisacriticalbusinessissue.

Messagingisthesoftwarethatsites
betweenthenetworkinfrastructureand
theclientsorecommerceapplications.

Messagingservicesofferssolutionsfor
communicatingunstructureddata,reports
aswellasstructureddatasuchas
purchaseorders,shippingnotices,etc.

21. M
IDDLEWARE
S
ERVICES

Withthegrowthofnetworks,clientserver
technologyandallotherformsofcommunicating
betweenoramongdifferentplatforms,the
problemsofgettingallthepiecestowork
togethergrew.togethergrew.

Usersdemandedinteractionbetweendissimilar
systems,networksthatpermittedshared
resourcesandapplicationsthatcouldbeaccessed
bymultiplesoftwareprograms.

Middlewareistheultimatemediatorbetween
softwareprogramsthatenablesthemto
communicatewithoneanother.

22. N
ETWORK
I
NFRASTRUCTURE
(W
WW
A
S
A A
RCHITECTURE
)

23. S
ECURITY
P
ROTOCOL

Acommunicationprotocolisaformaldescription
ofdigitalmessageformatsforexchangingthose
messagesinorbetweencomputingsystems.

Theinternetprotocol(IP)istheprinciple
communicationsprotocolusedfordatagramcommunicationsprotocolusedfordatagram
(packets)acrossaninternetusingtheinternet
protocolsuite.

24. TYPES
OF
E-COMMERCEE-COMMERCE

25. BUSINESS-TO-BUSINESS (B2B)

B2BstandsforBusinesstoBusiness.

ItconsistsoflargestformofEcommerce.

ThismodeldefinesthatBuyerandselleraretwo
differententities.
Itissimilartomanufacturerissuinggoodstothe

Itissimilartomanufacturerissuinggoodstothe
retailerorwholesaler.

E.g.:-Delldealscomputersandotherassociated
accessoriesonlinebutitisdoesnotmakeupall
thoseproducts.So,ingoverntodealthose
products,firststepistopurchasesthemfrom
unlikebusinessesi.e.theproducersofthose
products.

26. BUSINESS-TO-CONSUMER (B2C):

Itisthemodeltakingbusinessesandconsumers
interaction.

Thebasicconceptofthismodelistosellthe
productonlinetotheconsumers.

B2Cisthedirecttradebetweenthecompanyand

B2Cisthedirecttradebetweenthecompanyand
consumers.

Itprovidesdirectsellingthroughonline.

Forexample:ifyouwanttosellgoodsand
servicestocustomersothatanybodycan
purchaseanyproductsdirectlyfromsupplier’s
website.

27. BUSINESS-TO-EMPLOYEE (B2E)

Business-to-employee(B2E)electronic
commerceusesanintrabusinessnetwork
whichallowscompaniestoprovide
productsand/orservicestotheir
employees.employees.

Typically,companiesuseB2Enetworksto
automateemployee-relatedcorporate
processes.

28. CONSUMER-TO-CONSUMER (C2C)

Therearemanysitesofferingfree
classifieds,auctions,andforumswhere
individualscanbuyandsellthanksto
onlinepaymentsystemslikePayPal
wherepeoplecansendandreceivemoneywherepeoplecansendandreceivemoney
onlinewithease.

eBay'sauctionserviceisagreatexample
ofwhereperson-to-persontransactions
takeplaceeverydaysince1995.

29. PROS AND CONS
OF
E-COMMERCEE-COMMERCE

30. A
DVANTAGESOF
E-
COMMERCE
:

Buying/sellingavarietyofgoodsandservicesfrom
one'shomeorbusiness

Anywhere,anytimetransaction

Canlookforlowestcostforspecificgoodsorservice

Businessescanreachouttoworldwideclients-can
establishbusinesspartnershipsestablishbusinesspartnerships

Orderprocessingcostreduced

Electronicfundstransferfaster

Supplychainmanagementissimpler,faster,and
cheaperusingecommerce

Canorderfromseveralvendorsandmonitorsupplies.

Productionscheduleandinventoryofanorganizationcan
beinspectedbycooperatingsupplierwhocanin-turn
scheduletheirwork.

31. D
ISADVANTAGESOF
E-
COMMERCE
:

ElectronicdatainterchangeusingEDIis
expensiveforsmallbusinesses

Securityofinternetisnotverygood-
viruses,hackerattackscanparalysee-
commerce

Privacyofe-transactionsisnot
guaranteed.

32. L
IMITATIONS
O
F
E
COMMERCE
:

Security

Lack of Privacy

Tax Issue

Fear
Product Suitability

Product Suitability

Cultural Obstacles

High Labour Cost

Legal Issues

Technical Limitations

Huge Technological Cost

33. S
ECURITY
:

OneofthemainlimitationsofeCommerce
issecurity.

Inmostcases,peoplearehesitantto
providetheirpersonalandfinancial
detailsinspiteofadvanceddata
encryptionsecuritysystemsinplace.

Moreover,therearesomewebsitesthatdo
nothavethecapabilityandfeatures
installedtoauthenticatetransactions.

34. L
ACKOF
P
RIVACY
:

Tosomeextent,theprivacyofacustomer
iscompromisedineCommerce.

Youneedtoprovideyourpersonaldetails,
suchasaddress,telephonenumber,and
soontotheseller.

Therearestilllotsofsitesthatdonot
havetheadvancedtechnologytoprotect
sensitiveinformation.

Moreover,therearealsositesthat
illegallycollectconsumerstatistics
withoutpermission.

35. T
AX
I
SSUE
:

Incaseofdifferentgeographicallocations,
salestaxbecomesanissue.

Manyatimesellershavefacedproblems
inthecomputationofsalestax.

Moreover,physicalstoreshaveariskof
losingbusinessifonlinetransactionsare
exemptedfromtaxation.

36. F
EAR
:

Inspiteofpopularity,therestillresides
anelementofdoubtinthemindofpeople
whenitcomestoonlineshopping.

Thisisbecausethecustomercannot
physicallyexaminetheproductandisnot
sureaboutthefeaturesandattributes.

Thisiswhyalotofpeopleprefershopping
fromphysicalstores.

37. P
RODUCT
S
UITABILITY
:

Asalreadymentioned,itisnotpossible
forpeopletophysicallyexaminethe
productineCommerce.

Inmanycases,theoriginalproductmay
notmatchwiththepictureor
specificationsintheeCommercesite.

Thisabsenceof‘touchandfeel’createsa
discouragingeffect.

38. C
ULTURAL
O
BSTACLES
:

AstheprocessofeCommerceencompasses
customersacrosstheglobe,thehabits,
traditions,andculturediffer.

Theremayalsobelinguisticproblemsand
allthesemayleadtoissuesbetweenthe
sellerandbuyer.

39. H
IGH
L
ABOUR
C
OST
:

InordertogetthewholeeCommerceand
deliveryprocessright,aspecialized
workforceisrequired.

Togetalltheseintherightshape,
companieshavetoshedagoodamountof
moneyandemployatalentedpoolof
people.

40. L
EGAL
I
SSUES
:

Alotoflegalcompliancesandcyberlaws
thatneedtobetakencareofinan
eCommercebusiness.

Theseregulationsmayvaryfromcountry
tocountry.

Allthesereasonsdeterbusinessesfrom
goingelectronic.

41. T
ECHNICAL
L
IMITATIONS
:

eCommercerequiresadvancedtechnology
platformsforbetterperformance.

Somelimitations,suchaslackofproper
domain,networkandsoftwareissuesand
sooncanaffecttheseamlessperformance
ofaneCommercesite.

42. H
UGE
T
ECHNOLOGICAL
C
OST
:

Lastbutnottheleast;alotofmoneyneedstobe
investedtobebuiltupthetechnical
infrastructureneededtorunaneCommerce
business.

Moreover,theyneedtobeupgradedbasedto

Moreover,theyneedtobeupgradedbasedto
keepabreastwiththechangingtechnology.

43. S
COPE
O
F
E-
COMMERCE

Marketing, sales and sales promotion.

Pre-sales, subcontracts, supply.

Financing and insurance.

Commercial transactions –ordering, delivery, payment.

Product service and maintenance.
Co-operative product development.

Co-operative product development.

Distributed co-operative working.

Use of public and private services.

Business-to-administrations

Transport and logistics.

Public procurement.

Automatic trading of digital goods like games, learning material,
songs and music etc.

Accounting and financial management.

Legal advice

44. S
TRATEGY
:

IncreaseE-CommerceSearchUsability

UseHigh-QualityPhotographsandGood
ProductDescriptions

TryPersonalizingtheHomePage

TryPersonalizingtheHomePage

FocusonConsistentandUniqueContent

OptimizeShoppingCartFunctionality

BuildE-mailLists

ImproveYourSocialMediaStrategy

BuildAdvertisingStrategies

ImplementUserGeneratedContent