MIS 565 – What is Ecommerce

Instructor: Ali Hashmi

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What is E-commerce?

Use of Internet and Web to transact business

More formally:Digitally enabled commercial transactions

between and among organizations and individuals (B2C and B2B)

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E-commerce vs. E-business

E-business:A broader definition of Electronic Commerce that

includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization

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Difference between ecommerce and ebusiness

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Evolution of Web

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Unique Features of E-commerce Technology

Is ubiquitous (available everywhere, all the time) Offers global reach (across cultural/national boundaries) Operates according to universal standards (lowers market entry

for merchants and search costs for consumers) Provides information richness (more powerful selling

environment) Is interactive (can simulate face-to-face experience, but on

global scale) Increases information density (amount and quality of

information available to all market participants) Permits personalization/customization Social technology

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Revenue Model Describes how the firm will earn revenue, generate profits,

and produce a superior return on invested capital

Major types: Advertising revenue model e.g. Banner Ads, pay per click Subscription revenue model e.g. hosting services, ASPs, etc Transaction fee revenue model e.g. paypal, expedia,

etrade, etc Sales revenue model e.g. amazon, ebay, etc

Types of E-commerce

Classified by market relationship Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C)

Classified by technology used Peer-to-Peer (P2P) Mobile commerce (M-commerce)

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B2C

Involves online businesses attempting to reach individual consumers

Many types of business models within this category including online retailers, content providers, portals, transaction brokers, service providers, market creators and community providers

E.g. BarnesandNoble.com, 1800Flowers.com, Godiva.com, REI.com

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The Growth of B2C E-commerce

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SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b; authors’ estimates.

B2B

Involves businesses focusing on selling to other businesses

Two primary business models within B2B: Net marketplaces (includes e-distributors, e-procurement

companies, exchanges and industry consortia) Private industrial networks (includes single firm networks

and industry-wide networks) E.g.Direct email marketing company(mail chimp),

online CRM application (salesforce.com), grainger.com, techdata.com, alibaba.com, etc

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The Growth of B2B E-commerceFigure 1.5, Page 28

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SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.

C2C

Provides a way for consumers to sell to each other, with the help of an online market maker

eBay, half.com, craigslist, etc

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P2P

Uses peer-to-peer technology, which enables Internet users to share files and computer resources without having to go through a central Web server

E.g: Torrents, limewire, etc

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M-commerce

Use of wireless digital devices such as cell phones and handheld devices to enable transactions on the Web

E.g Mobile banking, Mobile ticketing, etc

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