UNIT 1

HISTORY OF E-COMMERCE
E-commerce or eCommerce is basically Electronic commerce that deals with buying and
selling of services and products over electronic systems such as Internet and other Computer
networks. E-commerce is commonly known as electronic marketing. With the extensive use of
Internet, the amount of trade carried out electronically has developed tremendously.

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on
the Internet, especially the World Wide Web. In practice, this term and a newer term, e-
business, are often used interchangeably. For online retail selling, the term e-tailing is
sometimes used.

Electronic commerce is generally considered to be the sales aspect of e-business. It also

consists of the exchange of data to facilitate the financing and payment aspects of the business
transactions.

1961 The idea of ARPANET, one of the earliest computer networks, was proposed
by Leonard Kleinrock in 1961, in his paper titled "Information Flow in Large
Communication Nets."
1965 The term "packet" was coined by Donald Davies in 1965, to describe data sent
between computers over a network.
1969 ARPANET was one of the first computer networks to use packet switching.
Development of ARPANET started in 1966, and the first two nodes, UCLA and SRI
(Standford Research Institute), were connected, officially starting ARPANET in
1969.
1969 The first RFC surfaced in April 1969, as a document to define and provide
information about computer communications, network protocols, and procedures.
1969 The first network switch and IMP (Interface Message Processor) was sent to UCLA
on August 29, 1969. It was used to send the first data transmission on ARPANET.
1969 The Internet was officially born, with the first data transmission being sent between
UCLA and SRI on October 29, 1969, at 10:30 p.m.
1970 Steve Crocker and a team at UCLA released NCP (NetWare Core Protocol) in 1970.
NCP is a file sharing protocol for use with NetWare.
1971 Ray Tomlinson sent the first e-mail in 1971.
1971 ALOHAnet, a UHF wireless packet network, is used in Hawaii to connect the islands
together. Although it is not Wi-Fi, it helps lay the foundation for Wi-Fi.
1973 Ethernet is developed by Robert Metcalfe in 1973 while working at Xerox PARC.
1973 The first international network connection, called SATNET, is deployed in 1973
by ARPA.
1973 An experimental VoIP call was made in 1973, officially introducing VoIP
technology and capabilities. However, the first software allowing users to make
VoIP calls was not available until 1995.
1974 The first routers were used at Xerox in 1974. However, these first routers were not
considered true IP routers.
1976 Ginny Strazisar developed the first true IP router, originally called a gateway, in
1976.
1978 Bob Kahn invented the TCP/IP protocol for networks and developed it, with help
from Vint Cerf, in 1978.
1981 Internet protocol version 4, or IPv4, was officially defined in RFC 791 in 1981. IPv4
was the first major version of the Internet protocol.
1981 BITNET was created in 1981 as a network between IBM mainframe systems in the
United States.
1981 CSNET (Computer Science Network) was developed by the U.S. National Science
Foundation in 1981.
1983 ARPANET finished the transition to using TCP/IP in 1983.
1983 Paul Mockapetris and Jon Postel implement the first DNS in 1983.
1986 The NSFNET (National Science Foundation Network) came online in 1986. It was
a backbone for ARPANET, before eventually replacing ARPANET in the early
1990s.
1986 BITNET II was created in 1986 to address bandwidth issues with the original
BITNET.
1988 The first T1 backbone was added to ARPANET in 1988.
1988 WaveLAN network technology, the official precursor to Wi-Fi, was introduced to
the market by AT&T, Lucent, and NCR in 1988.
1988 Details about network firewall technology was first published in 1988. The
published paper discussed the first firewall, called a packet filter firewall, that was
developed by Digital Equipment Corporation the same year.
1990 Kalpana, a U.S. network hardware company, developed and introduced the first
network switch in 1990.
 1996 IPv6 was introduced in 1996 as an improvement over IPv4, including a wider range
of IP addresses, improved routing, and embedded encryption.
1997 The first version of the 802.11 standard for Wi-Fi is introduced in June 1997,
providing transmission speeds up to 2 Mbps.
1999 The 802.11a standard for Wi-Fi was made official in 1999, designed to use the 5
GHz band and provide transmission speeds up to 25 Mbps.
1999 802.11b devices were available to the public starting mid-1999, providing
transmission speeds up to 11 Mbps.
1999 The WEP encryption protocol for Wi-Fi is introduced in September 1999, for use
with 802.11b.
2003 802.11g devices were available to the public starting in January 2003, providing
transmission speeds up to 20 Mbps.
2003 The WPA encryption protocol for Wi-Fi is introduced in 2003, for use with 802.11g.
2003 The WPA2 encryption protocol is introduced in 2004, as an improvement over and
replacement for WPA. All Wi-Fi devices are required to be WPA2 certified by 2006.
2009 The 802.11n standard for Wi-Fi was made official in 2009. It provides higher
transfer speeds over 802.11a and 802.11g, and it can operate on the 2.4 GHz and 5
GHz bandwidths.
2018 The Wi-Fi Alliance introduced WPA3 encryption for Wi-Fi in January 2018, which
includes security enhancements over WPA2.

HİSTORY OF INTERNET
The Internet had its roots during the 1960's as a project of the United States government's
Department of Defense, to create a non-centralized network. This project was called
ARPANET (Advanced Research Projects Agency Network), created by the Pentagon's
Advanced Research Projects Agency established in 1969 to provide a secure and survivable
communications network for organizations engaged in defense-related research. In order to
make the network more global a new sophisticated and standard protocol was needed. They
developed IP (Internet Protocol) technology which defined how electronic messages were
packaged, addressed, and sent over the network. The standard protocol was invented in 1977
and was called TCP/IP (Transmission Control Protocol/Internet Protocol).
TCP/IP allowed users to link various branches of other complex networks directly to the
ARPANET, which soon came to be called the Internet. Researchers and academics in other
fields began to make use of the network, and eventually the National Science Foundation
(NSF), which had created a similar and parallel network, called NSFNet, took over much of
the TCP/IP technology from ARPANET and established a distributed network of networks
capable of handling far greater traffic. In 1985, NSF began a program to establish Internet
access across the United States. They created a backbone called the NSFNET and opened their
doors to all educational facilities, academic researchers, government agencies, and
international research organizations. By the 1990's the Internet experienced explosive growth.

It is estimated that the number of computers connected to the Internet was doubling every year.
Businesses rapidly realized that, by making effective use of the Internet they could tune their
operations and offer new and better services to their customers, so they started spending vast
amounts of money to develop and enhance the Internet. This generated violent competition
among the communications carriers and hardware and software suppliers to meet this demand.
The result is that bandwidth (i.e., the information carrying capacity of communications lines)
on the Internet has increased tremendously and costs have dropped. It is widely believed that
the Internet has played a significant role in the economic success.

HİSTORY OF WORLD WİDE WEB The World Wide Web (WWW) allows computer users
to position and view multimedia-based documents (i.e., documents with text, graphics,
animations, audios and/or videos) on almost any subject. Even though the Internet was
developed more than three decades ago, the introduction of the WWW was a relatively recent
event. In 1990, Tim Berners-Lee of CERN (the European Laboratory for Particle Physics)
developed the World Wide Web and several communication protocols that form the backbone
of the WWW. The Internet and the World Wide Web will surely be listed among the most
significant and profound creations of humankind. In the past, most computer applications ran
on stand alone computers. (i.e., computers that were not connected to one another) Today’s
applications can be written to communicate among the world’s hundreds of millions of
computers. The Internet makes our work easier by mixing computing and communications
technologies. It makes information immediately and conveniently accessible worldwide. It
makes it possible for individuals and small businesses to get worldwide contact. In the last
decade, the Internet and World Wide Web have altered the way people communicate, conduct
business and manage their daily lives. They are changing the nature of the way business is
done.
HİSTORY OF WORLD WİDE WEB

The World Wide Web (WWW) allows computer users to position and view multimedia-based
documents (i.e., documents with text, graphics, animations, audios and/or videos) on almost
any subject. Even though the Internet was developed more than three decades ago, the
introduction of the WWW was a relatively recent event. In 1990, Tim Berners-Lee of CERN
(the European Laboratory for Particle Physics) developed the World Wide Web and several
communication protocols that form the backbone of the WWW. The Internet and the World
Wide Web will surely be listed among the most significant and profound creations of
humankind. In the past, most computer applications ran on standalone computers. (i.e.,
computers that were not connected to one another) Today’s applications can be written to
communicate among the world’s hundreds of millions of computers. The Internet makes our
work easier by mixing computing and communications technologies. It makes information
immediately and conveniently accessible worldwide. It makes it possible for individuals and
small businesses to get worldwide contact. In the last decade, the Internet and World Wide
Web have altered the way people communicate, conduct business and manage their daily lives.
They are changing the nature of the way business is done.

WHAT İS “ELECTRONİC BUSİNESS”?

E-Business is the conduct of business on the Internet, not only buying and selling, but
also servicing the customers and collaborating with the business partners. E-Business
includes customer service (e-service) and intra-business tasks.

Example of E-Business:

 An online system that tracks the inventory and triggers alerts at specific levels
is E-Business Inventory Management is a business process. When it is facilitated
electronically, it becomes part of E-Business.
  An online induction program for new employees automates part or whole of its offline
counterpart.

Components of electronic business

The core components of e-business are information, communication, and transaction.

Business partners use digital networks (i.e. public or private communication networks) to
conduct business processes using innovative technologies to improve efficiency. Three key
areas are particularly important for e-business:
E-procurement: the electronic sourcing of products and services by companies, focused on
reducing costs and effort.

Online stores: the electronic sale of products and services via appropriate platforms, such
as online stores.

Online marketplaces: electronic commerce via digital networks, connecting the buyers and
suppliers of products and services.

There are also two further areas of e-business:

Online communities: electronic communication network between individuals and

organizations, which supports data and knowledge sharing as well as the preparation of
transaction decisions.

Online companies: electronic business cooperation for connecting individual company

services, resulting in a virtual business with a common transaction offer.

Features of e-business

To fully understand the concept of e-business, you must first grasp the link between e-business
and the net economy and know who the typical market participants are in the industry.

Net economy and e-business

The range of e-business is determined by the net economy. This refers to the commercial use
of digital data networks for handling information, communication, and transaction
processes via various platforms.

Since the late 90s, or even earlier, the development of digitalization not only led to a major
structural change in society, but also in the economy. Since then, the focus has shifted to the
information sector. The systematic use of technology to collect and utilize information laid the
foundations of a so-called “information economy,” in which competitiveness is achieved
through knowledge superiority.

This section of the economy, known as the “net economy,” now exists in parallel with the
traditional, “real economy.”
Market participants in e-business

E-business can take place between a large number of market participants: between businesses
and consumers, various private individuals, public administrations, and other organizations
such as NGOs.

Generally speaking, these various market participants can be divided into three distinct
categories:

 Business (B)
 Consumer/citizen (C)
 Administration (A)

All three categories can play the role of either buyer or service provider within the market,
meaning there are nine possible combinations for e-business relationships. Within this
context, B2C and B2B belong to e-commerce, while A2B (administration-to-business) and
A2A (administration-to-administration) are a part of the so-called e-government sector (also a
part of e-business).

Function of electronic business

The most important role of electronic business is “electronic value creation” – the generation
of electronic added value. The forms of electronic added value are usually distinguished in
the following way:

 Structuring value: an online offer achieves an overview of a large quantity of

information
 Selection value: an online offer provides specific database information upon request
 Matching value: an online offer makes it possible to merge inquiries from supplier and
buyers more efficiently
 Transaction value: an online offer makes a business more efficient
 Coordination value: an online offer allows different providers to better combine their
services
 Communication value: an online offer improves communication between different
consumers
Depending on which type of value a company decides to pursue, they can choose one or
more value activities – for example the collection, structuring, pre-selection, summary, or
distribution of information. A so-called “digital information product” can also be created,
offering added values which the customer is prepared to pay for. This information product may
be a website, blog comparison portal, e-book, or a software application.

The electronic value creation process involves the following steps:

 Collecting large quantities of information to identify data relevant to the product

 Processing the information and transforming it into a product
 Transferring the final information product to the customer
 Repeat this process whenever new information becomes available – information
products are not static and must be kept up to date

Besides the generation of electronic added value, the various long-term goals of the e-business
must be determined, such as how best to automate commercial processes, or establishing new
business models (such as cutting out middlemen).

Examples of e-business

There are countless examples of different e-business activities, but here is a brief selection.

The e-procurement sector includes the following activities:

 Organize the implementation of a desktop purchasing system (DPS) that supports the
whole procurement process, such as checking stock availability and handle the order
and payment
 Constructing and operating an online marketplace for products and services
 Integrating various electronic supplier catalogs into your own enterprise resource
planning (ERP) system to support procurement, warehouse management, order
processing, production management, and logistics

The e-commerce sector includes the following activities:

 Designing and maintaining an internet presence and/or an online store including:

products or services accessible from anywhere at all times, multiple payment options,
 automatic e-mail notifications on orders, and customer support (live chat, hotlines, or
help centers)
 Developing and provisioning additional content, such as an informational blog or
comparison portal
 Expanding online marketing and targeting advertising to customers, for example by
using big data from cookies, purchase behavior, and customer data

E-Business enables organizations to accomplish the following goals:-

• Reach new markets.

• Create new products or services.

• Build customer loyalty

• Make the best use of existing and emerging technologies.

• Achieve market leadership and competitive advantage.

• Enrich human capital.

FEW EXAMPLES OF E-Commerce are:

• Amazon.com, an online bookstore started in 1995 grew its revenue to more than 600$
million in 1998.
• Microsoft Expedia, an integrated online travel transaction site helps to choose a flight, buy
an airline ticket, book a hotel, rent a car etc. in only a few minutes.
E-Commerce vs Traditional Commerce
• E- Commerce is about the sale and purchase of goods or services by electronic means,
particularly over the internet. In a pure e-commerce system, transactions take place via
electronic means. In this case, you will access a cyber bookstore and download a digital
book from a server computer.
• In a physical or traditional commerce system, transactions take place via contact between
humans usually in a physical outlet such as a bookstore.
For e.g. if you want to buy a book, you will go to a physical bookstore and buy the physical
book from a salesman.
• E-Commerce is more suitable for standard goods, intangible goods; whereas traditional
commerce is more suitable for non standard goods, perishable goods, and expensive goods.
 • Complex products such as cars are better served by integrating e-commerce and physical
commerce.

Advantages of E-Commerce to Businesses

• Increased potential market share:- The internet enables businesses to have access to
international markets thereby increasing their market share. Companies can also achieve
greater economies of scale.
• Low cost Advertising:- Advertising on the internet costs less than advertising on print or
television depending on the extent of advertisement.Advertising on the internet itself is less
 costly since there is less cost associated with it in terms of printing and limited television
spots.
• Low barriers to Entries:- Anyone can start up a company on the internet. Start-up costs are
a lot lower for companies since there is less need for money for capital.
• Strategic Benefits:- The Strategic benefits of making a business e-commerce enabled is that
it helps reduce the delivery time, labour cost and the cost incurred in document preparation,
data entry, error detection etc.
Disadvantages of E-Commerce
• Hidden Costs:- Although buying online is convenient, the cost of this convenience is not
always clear at the front end. For e.g. on-line purchases are often accompanied by high shipping
and re-stocking fees, a lack of warranty coverage and unacceptable delivery times. In fact, too
many e-commerce companies have developed a reputation of overcharging for shipping and
handling.
• Lack of Security:- One of the main roadblocks to the wide acceptance of e-commerce by
businesses and consumers alike is the perceived lack of adequate security for on-line
transactions.
For e.g. Consumers are growing increasingly worried about providing credit card information
over the Internet.
During the past few years, the press has been filled with reports about hackers breaking into e-
business and stealing credit card information.
• Lack of Privacy:- Customers also worry about the privacy implications of data gathered by
organizations of all types and sizes. Even at the simplest data level, sales information is stored
in databases connected to web servers, thus exposing the information to cyber criminals.
Because data gathering on the web is so easy, databases routinely contain information about
customer purchasing habits, credit information and so on. In many cases, companies sell
customer database information to marketing companies. In turn, the marketing companies
engage in massive e-mail campaigns to attract new customers. It doesn’t take long for the
customer’s email box to be filled with unwanted email (also known as Spam).
• Network Unreliability:- Although the Internet is designed to overcome the single point of
failure problem, there have been several well-publicized incidents of network failures during
the past few years. Network reliability problems may be generated by such factors as:-
Ø Equipment failure in the network connection provider.
Ø Accidental problems caused by nature-such as lightning, floods, earthquakes that affect
communication lines.
Ø Long response time due to increased network traffic or inadequate bandwidth.
• Low Service Levels:- Another common complaint about doing business online is the low
level of customer service that online companies tend to provide. Although technology has
automated business transactions to a large extent, there remains a real need for the human
touch. Therefore e-commerce websites must provide:-
 A pleasant and problem free pre-ordering and ordering experience. The website design is
an important interface.
 Readily available easily used feedback options.
 Quick complaint resolution.
 Timely and low-cost shipping delivery to customers.

Scope of E-Commerce
• E-Commerce is a general concept covering any form of business transaction or information
exchange executed using information and communication technologies ((ICT’s).
• It includes electronic trading of goods, services and electronic material.
It takes place between companies, between companies and their customers or between
companies and public administrations.
Types of E-Commerce/ E-Commerce Market Models
There are five types of E-Commerce:-
 Business To Business (B2B)
 Business To Consumer (B2C)
 Consumer To Business (C2B)
 Consumer To Consumer (C2C)
 Business To Government (B2G)
Business To Business (B2B):- Business to Business or B2B refers to e-commerce activities
between businesses. An E-Commerce company can be dealing with suppliers or distributers or
agents. These transactions are usually carried out through Electronic Data Interchange (EDI).
EDI is an automated format of exchanging information between businesses over private
networks.
For e.g. manufacturers and wholesalers are B2B Companies.
By processing payments electronically, companies are able to lower the number of clerical
errors and increase the speed of processing invoices, which result in lowered transaction fees.
In general, B2Bs require higher security needs than B2Cs.
With the help of B2B E-commerce, companies are able to improve the efficiency of several
common business functions, including supplier management, inventory
management and payment management.

Business To Customer (B2C):- Business to Customer or B2C refers to E-Commerce activities

that are focused on consumers rather than on businesses.
For instance, a book retailer would be a B2C company such as Amazon.com. Other examples
could also be purchasing services from an insurance company, conducting on-line banking and
employing travel services.

Customer To Business (C2B):-

Customer to Business or C2B refers to E-Commerce activities which use reverse pricing
models where the customer determines the prices of the product or services.
In this case, the focus shifts from selling to buying. There is an increased emphasis on customer
empowerment.
 In this type of E-Commerce, consumers get a choice of a wide variety of commodities and
services, along with the opportunity to specify the range of prices they can afford or are willing
to pay for a particular item, service or commodity.

Customer To Customer (C2C):-

Customer to Customer or C2C refers to E-commerce activities, which use an auction style
model. This model consists of a person-to-person transaction that completely excludes
businesses from the equation.
Customers are also a part of the business and C2C enables customers to directly deal with each
other.
An example of this is peer auction giant ebay.

Business To Government (B2G):- It is a new trend in E-Commerce. This type of E-

Commerce is used by the government departments to directly reach to the citizens by setting
up the websites.
These websites have government policies, rules and regulations related to the respective
departments.
Any citizen may interact with these websites to know the various details. This helps the people
to know the facts without going to the respective departments.
This also saves time of the employees as well as the citizens.

History of E-Commerce
• The history of Ecommerce seems rather short but its journey started over 40 years ago in
hushed science labs
• In the 1960s, very early on in the history of Ecommerce, its purpose was to exchange long
distance electronic data. In these early days of Ecommerce, users consisted of only very large
companies, such as banks and military departments, who used it for command control
communication purposes. This was called EDI, and was used for electronic data interchange.
• Originally, electronic commerce was identified as the facilitation of commercial transactions
electronically, using technology such as Electronic Data Interchange (EDI) and Electronic
Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to
send commercial documents like purchase orders or invoices electronically.
• The growth and acceptance of credit cards, automated teller machines (ATM) and telephone
banking in the 1980s were also forms of electronic commerce
• In 1982 Transmission Control Protocol and Internet Protocol known as TCP & IP was
developed. This was the first system to send information in small packets along different routes
using packet switching technology, like today's Internet! As opposed to sending the
information streaming down one route
• Beginning in the 1990s, electronic commerce would include enterprise resource planning
systems (ERP), data mining and data warehousing
• In 1995, with the introduction of online payment methods, two companies that we all know of
today took their first steps into the world of Ecommerce. Today Amazon and ebay are both
amongst the most successful companies on the Internet

Functions of E-Commerce
• Marketing:- One of the areas it impacts particularly is direct marketing. In the past this was
mainly door-to-door, home parties (like the Tupperware parties) and mail orders using
catalogues or leaflets. This moved to telemarketing and TV selling with the advance in
television technology and finally developed into e-marketing.
• Human Resource Management:- Issues of on-line recruiting, home working and
‘entrepreneurs’ working on a project by project basis replacing permanent employees.
• Business law and ethics:- The different legal and ethical issues that have arisen as a result of
a global ‘virtual’ market. Issues such as copyright laws, privacy of customer information etc.
• Management Information System:- Analysis, design and implementation of e-business
systems within an organization ; issues of integration of front-end and back-end systems.
• Product Operations and Management:- The impact of on-line processing has led to reduced
cycle time. It takes seconds to deliver digitized products and services electronically; similarly
the time for processing orders can be reduced by more than 90 percent from days to minutes.
• Finance and Accounting:- On-line banking ; issues of transaction costs ; accounting and
auditing implications where ‘intangible’ assets and human capital must be tangibly valued in
an increasing knowledge based economy.
• Economy:- The impact of E-commerce on local and global economies; understanding the
concepts of a digital and knowledge based economy and how this fits into economic theory.

E-Commerce Applications
• E-Marketing
• E-Advertising
• E-Banking
• E-Learning
• Mobile Commerce
• Online Shopping
• Entertainment

E-Marketing:-
 E-Marketing also known as Internet Marketing, Online Marketing, Web Marketing.
 It is the marketing of products or services over the internet.
 It is consider to be broad in scope because not refers to marketing on the internet but also
done in Email and wireless media.
 E-Marketing ties together the creative and technical aspects of the internet, including design
development, advertising and sales.
 Internet marketing is associated with several business models i.e., B2C, B2B, C2C.
 Internet marketing is inexpensive when examine the ratio of cost to the reach of the target.
E-Advertising:-
 It is also known as online advertising it is a form of promotion that uses internet and
World Wide Web to deliver marketing messages to attracts customers.
 Example: Banner ads, Social network advertising, online classified advertising etc.
 The growth of these particular media attracts the attention of advertisers as a more
productive source to bring in consumers.

E-Banking:-
 Means any user with a personal computer and browser can get connected to his banks,
website to perform any of the banking functions. In internet banking system the bank
has a centralized data base i.e., web-enabled.
 Best example for E-Banking is ATM.
 An ATM is an electronic fund transfer terminal capable of handling cash deposits,
transfer, Balance enquiries, cash withdrawals, and pay bills.
SERVICES THROUGH E-BANKING:
 Bill Payment Service
 Fund Transfer
 Investing through Internet Banking
 Shopping

E-Learning:-
 E-Learning comprises all forms of electronically supported learning and teaching.
 E-Learning applications and processes include web-based learning, computer-based
learning.
 Content is delivered via. The internet, intranet/extranet, audio, or video tape, satellite TV.
 E-Learning is naturally suited to distance and flexible learning, but can also be used
conjunction with face-to-face teaching.
 E-Learning can also refer to the educational website such as those offering learning
scenarios worst and interactive exercises for children.
 A learning management system (LMS) is software used for delivering, tracking, and
managing training /education.
Mobile Commerce:-
 Mobile Commerce also known as M-Commerce, is the ability to conduct, commerce as a
mobile device, such as mobile phone.
 Banks and other financial institutions use mobile commerce to allow their customers to
access account information and make transactions, such as purchasing, withdrawals etc.,
 Using a mobile browser customers can shop online without having to be at their personal
computer.
SERVICES ARE:
1. Mobile ticketing
2. Mobile contract purchase and delivery mainly consumes of the sale of ring tones, wallpapers
and games of mobile phones.
3. Local base services
 Local discount offers
 Local weather
4. Information services
 News
 Sports, Scores

Online Shopping:-
 Online shopping is the process whereby consumers directly buy goods or services from a
sell in real time, without intermediary services over the internet.
 An online shop, e-shop, e-store, internet shop web shop, web store, online store, or virtual
shop evokes the physical analogy of buying products or services in a shopping center.
 In order to shop online, one must be able to have access to a computer, a bank account and
debit card.
 Online shoppers commonly use credit card to make payments , however some systems
enable users to create accounts and pay by alternative means ,such as
 Cheque.
 Debit cards.
 Gift cards
Online stores are usually available 24 hours a day

Entertainment:-
The conventional media that have been used for entertainment are
1. Books/magazines.
2. Radio.
3. Television/films.
4. Video games.
Online books /newspapers, online radio, online television, online firms, and online games are
common place in internet where we can entertain.
Online social networking websites are one of the biggest sources of E-entertainment for today’s
tech-savvy generation.

E-Commerce - B2C Model

In B2C model, a business website is a place where all the transactions take place directly
between a business organization and a consumer.

In the B2C model, a consumer goes to the website, selects a catalog, orders the catalog, and
an email is sent to the business organization. After receiving the order, goods are dispatched
to the customer. Following are the key features of the B2C model −

 Heavy advertising required to attract customers.

  High investments in terms of hardware/software.

 Support or good customer care service.

Consumer Shopping Procedure

Following are the steps used in B2C e-commerce −

A consumer −

 determines the requirement.

 searches available items on the website meeting the requirment.

 compares similar items for price, delivery date or any other terms.

 places the order.

 pays the bill.

 receives the delivered item and review/inspect them.

 consults the vendor to get after service support or returns the product if not satisfied
with the delivered product.

Disintermediation and Re-intermediation

In traditional commerce, there are intermediating agents like wholesalers, distributors, and
retailers between the manufacturer and the consumer. In B2C websites, a manufacturer can
sell its products directly to potential consumers. This process of removal of business layers
responsible for intermediary functions is called disintermediation.
Nowadays, new electronic intermediary breeds such as e-mall and product selection agents
are emerging. This process of shifting of business layers responsible for intermediary
functions from traditional to electronic mediums is called re-intermediation.

Early Visions of E-Commerce

 Computer scientists - Inexpensive, universal communications and computing
environment accessible by all.
 Economists - Nearly perfect competitive market and friction-free commerce.
 Disintermediation, lowered search costs.
 Entrepreneurs - Extraordinary opportunity for first movers.
  To create network effect.

Predictions for the Future

 E-commerce technology will continue to propagate through all commercial

activity, with overall revenues from e-commerce, the number of products and
services sold over the Web, and the amount of Web traffic all rising.
 E-commerce prices will rise to cover the real costs of doing business on the
Web.
 Traditional well-endowed and experienced Fortune 500 companies will play a
growing and more dominant role.
 Number of successful pure online stores will remain smaller than integrated
offline/online stores.
 The number of successful pure online companies will continue to decline and
most successful e-commerce firms will adopt an integrated, multi-channel
bricks and-clicks strategy.
 Regulation of e-commerce and the Web by government will grow both in the
United States and worldwide.

EC Organizing Themes

 Technology - Understanding of IT upon which it is built including internet and WWW.

 Business - Understanding business concepts such as electronic markets, information
goods, business models, firm and industry value chains, industry structure, and
consumer behavior in electronic markets.
 Society - Understanding the pressure of EC on modern society. Primary issues –
intellectual property, individual privacy, and public policy.
Academic Disciplines Concern with EC

Technical Approach

 Computer Science - They are concerned with the development of computer hardware,
software, and telecommunication systems, standard, encryption and database design.
 Management Science - They are interested in building mathematical model of business
processes, optimization of processes, opportunity to use Internet technology to achieve
efficient business operations.

Behavioral Approach

 Information Systems - Data mining, Search engine design and AI.

 Economics - Consumer behavior, pricing, and features of EC market.
 Marketing - Brand development and extension, consumer behavior on web sites, using
web technology target different segment consumer groups.
 Finance/Accounting - Valuation and accounting practices.
 Sociology/Psychology - Internet usage, the role social inequalities, use of web as a
social network and group communications.