lesson 1 - e-commerce

E-COMMERCEDOING BUSINESS ONLINE

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Learning Goals

By the end of this courseware, the student is expected to: 1. Apply fundamentals of entrepreneurship in relation to

e-commerce;2. Understand essential requirements to do business

and transact over the Internet;3. Gain skills in using basic tools online to sell products

and services online;4. Develop basic SEO skills in connection with setting up

an online store; and,5. Learn marketing techniques and skills used by

business people online.

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WHAT IS E-COMMERCE?

LESSON 1

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LESSON 1: What is E-commerce?

At the end of this lesson, the student will be able to:

1. Explain what e-commerce is and how it works.

2. Know the milestones and critical events in the history of e-commerce.

3. Recognize the present and possible future prospects for e-commerce.

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1. Defining E-commerce

2. E-commerce Timeline

3. The Changing Landscape

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Defining E-Commerce

E-commerce

• Refers to all forms of business transactions conducted electronically over computer networks, the Internet in particular

• While e-commerce typically means buying and selling online, it is not limited to the basic exchange of goods and services

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Defining E-Commerce

• It also involves many other activities and procedures that are necessary to facilitate, validate or consummate a given transaction.

• This includes the efficient interaction among producers, consumers and their intermediaries, and the swift flow of business-related data across networks.

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Defining E-Commerce

Business Processes

• Create online store with automated systems for accepting payment, shipping the product, and providing customer service

• Implement an effective marketing strategy

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Defining E-Commerce

Business Models

All business activities in e-commerce can be categorized into four major models, based on which parties are engaged in the transaction and based on the direction of the trade

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Defining E-CommerceBusiness Models

1. Business to Business (B2B)• refers to electronic trade that takes place between

companies

• consumers are not involved

• Ex. : producers buying components from suppliers and manufacturers selling finished goods to distributors

• primarily responsible for keeping the supply chain intact

• constitutes the bulk of business transactions in e-commerce

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Defining E-CommerceBusiness Models2. Business to Consumer (B2C)

• simplest and most recognizable form of e-commerce• online businesses sell goods and services to the general

public• refers to the direct trade between companies and

consumers• B2C is what the average person thinks of when “e-

commerce” is mentioned• It is characterized by a line of shops which customers can

visit to purchase goods, just like in the traditional sense.

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Defining E-CommerceBusiness Models3. Consumer to Business (C2B)

• C2B is a rapidly growing trend in e-commerce.• Consumers are now empowered to demand specific

goods and services from online businesses. • Rather than passively choose a product from a given

catalog, customers can directly tell marketers their exact requirements.

• Using this model, clients may even bid out a projected sale to different sellers—the seller which can best satisfy the given requirements gets the sale. Through C2B, e-commerce has become a two-way street.

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Defining E-CommerceBusiness Models4. Consumer to Consumer (C2C)

• C2C showcases the egalitarian side of e-commerce.• consumers are given a venue to trade among themselves• It is not required to set up a proper business to sell. It’s

not even necessary to put up an online store. Anybody can sell anything.

• All the seller has to do is post whatever it is that he or she has for sale. People can negotiate and haggle, but in most instances the buyer with the best bid gets to purchase the product. Otherwise, prices are fixed and products are sold on a first-come, first-served basis.

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Defining E-Commerce

Business Models

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Defining E-CommerceBusiness ModelsPeer to Peer (P2P)• the most preferred mode of sharing information because it

allows computer terminals in a network to hook up without having to go through a central web server

• not popular among online entrepreneurs because it is not suitable for income generation.

• Because P2P was intended to be a means for the free exchange of data, it lacks the necessary safeguards to prevent piracy. As a result, a lot of people use P2P to share music files and movies illegally.

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Defining E-Commerce

Business Applications

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ONLINE SHOPPING

ELECTRONIC PAYMENTS

ONLINE AUCTIONS

INTERNET BANKING

ONLINE BOOKING & TICKETING


E-Commerce Timeline

Electronic Data Interchange (EDI)

• facilitated the exchange of data—invoices, purchase orders, shipping confirmations—from one computer to another

Electronic Funds Transfer (EFT)

• used by banks to move huge amounts of money digitally

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E-Commerce Timeline

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E-Commerce

Timeline

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The Changing Landscape

Emerging Trends

• Group buying or collective buying

• Social Commerce

• Private sample sale

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The Changing Landscape

Shifting Balance

The evolution of e-commerce is driven not only by technology. More importantly, it is fueled by how many people actually use it, and the extent with which they have embraced it as a part of their daily lives.

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Summary

E-commerce refers to all forms of business transactions conducted electronically over computer networks, the Internet in particular. It has many different applications, the most common of which include online shopping, online auction and Internet banking. It continuously evolves as technological advances are made and new business trends emerge.

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Word BankE-commerce

short for electronic commerce; refers to all forms of business transactions conducted electronically over computer networks

P2PPeer to Peer; an e-commerce business model where data is exchanged freely between computer terminals in a network without having to go through a central web server programming language

M-commerceMobile commerce; electronic business transactions which are carried out using a portable device, like a cellular phone

E-tailingshort for electronic commerce; refers to all forms of business transactions conducted electronically over computer networks

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Word BankEDI

Electronic Data Interchange; a networking technology predating the Internet that facilitated the exchange of data from one computer to another

Browsera computer interface used to access the Internet

World Wide Weba system of linked hypertext documents

Group buyingalso known as collective buying; a new business model where prices are reduced when a minimum number of buyers make the purchase

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