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Chapter OneUnderstanding e-

commerce

Learning objectives Evolution of e-commerce Role of technology in e-commerce Internet and e-commerce

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History of e-commerce

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History of ecommerce dates back to the year (1991) when the internet was made available for commercial purposes

web sites were allowed to use internet for business transactions

Do business electronically from virtually anywhere in the world that has a computer.

In 2004 alone, e-commerce generated well over $100 billion in retail business and over $1.5 trillion business-to-business traffic.

At first, the term ecommerce meant the process of execution of commercial transactions electronically

leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) were used

CONT’D

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Factors that impacted e-commerce

Security wrong usage of credit information Privacy security protocol such as HTTP

The Dot Com era

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"brick and mortar" retailers recognized the advantages of electronic commerce

first generation e-commerce portal In spite of ‘dotcom’ burst, the ecommerce sales continued to grow

in the next few years customers prefer e-commerce over tele orders Today’s Internet promotes individualism.

Case: Amazon.com: synonymous with e-commerce Case: Dell: An evolutionary e-commerce

What is e-commerce

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E-commerce is a short version of the term Electronic Commerce transactions related to online buying and selling of products or

services done using electronic systems such as the Internet and other

computer networks penetration and spread of the internet has fuelled e-commerce Examples os e-commerce are electronic funds transfer, supply

chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems

definition of e-commerce in modern the modern times implies that it typically uses the World Wide Web at least at any point in the transaction's lifecycle

Online retailers are sometimes known as e-tailers online retail is sometimes known as e-tail

Types of e-commerce

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B2B: E-commerce that is conducted between businesses is referred to as Business-to-business (1) open to the entire public or (2) limited to a group of

businesses who have been part of the specific group business-to-consumer (B2C), business-to-government (B2G)

All the forms of e-commerce include following steps. i) account acquisition, ii) product discovery through search and browse, iii) price negotiation, iv) payment, and v) product delivery.

In some cases, dispute resolution and customer services may also exist

Changing times in e-commerce

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Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).

Automated Teller Machines (ATMs) growth and acceptance of credit cards, and telephone banking

became part of e-commerce Broadband connections to homes is fulfilling the ultimate

mission of e-commerce. E-mail is now the very connectivity of e-commerce. Bar code scanning is on the way out, replaced by sophisticated

biometric technology. Legal downloading of music, video, and other digital products

via the Web is increasing. Big businesses, as well as small- and medium-sized firms, can

afford to develop a Web presence quickly, reliably, and at an affordable cost.

E-commerce has gone international.

E-commerce components

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Important component of e-commerce based firm is the website website should have technology that will make it easier for

its customers to navigate site should offer every single feature necessary fully-functional and sustainable ecommerce web site stable server for hosting provide customer specific services technology partners who constantly upgrade the features

as well as technology help business partners such as logistics partners and

suppliers to share and exchange business data Alternatively SaaS can be used for running these

services (reduce cost)

E-commerce Versus E-business

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E-commerce Selling goods and services on the retail level with anyone,

anywhere, via the Internet Greater efficiency and effective exchange of goods and

services Exchange based upon transaction

A block of information exchange between the merchant and its customers via the corporate Web site

www.amazon.com

E-business Connecting critical business systems and constituencies

directly via the Internet

E-commerce and Web 2.0

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web 2.0 and collaborate collaboration becomes a mutual touch point for all the

stakeholders aggregating information about people, products and

services reduces time spent searching resources for

information, eliminates redundant data increased relevance, delivering key information to

places where it can be used effectively Digital Convergence - digital devices communicating

with one another Anytime, anywhere, anyone - e-commerce is available

to anyone (24/7) Demand for customized products and services - mass

customization puts pressure on firms to handle customized requests on a mass-market scale

Business-to-Government (B2G)

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The government market is strikingly similar to B2B.

Huge potential for savings in $1.8 trillion federal and $1 trillion state and local expenditures

Changing the status quo in government is not so easy

Changes to employee tasks and job restructuring often create resistance

Tax savings potential is not easily recognized Committing to technology means constant need for

upgrades and additional costs

E-commerce Business Models

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Storefront Model

Click-and-Mortar Model

Built to Order Merchant Model

Service Provider Model

Subscription-based Access Model

Prepaid Access Model

Broker Model

Advertiser Model

Portal Site Model

Free Access Model

Virtual Mall Model

Virtual Community Model

Infomediary Model

Summary

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Electronic commerce (EC) is the ability to deliver products, services, information, or payments via networks such as the Internet and the World Wide Web.

Electronic business connects critical business systems directly to key constituents

The rise of specialized Web sites and Web logs (blogs) generated opportunities to read and write on a vast array of topics

Several drivers promote EC: digital convergence

Advantages of EC