Learning Module in E-commerce (ITec3093)

SCHOOL OF COMPUTING & INFORMATICS

Department of Information Technology

Chapter I. Overview of E-commerce

• e-commerce and describe how it differs from e-business

• the unique features of e-commerce technology and discuss their business
significance
• Traditional vs Electronic commerce
• the major types of e-commerce
• Successes in E-commerce
• the major academic disciplines contributing to e-commerce research

Objectives:

 Understand e-commerce
 Demonstrate an understanding of the major types of E-commece
 Differentiate Traditional versus Electronic commerce

WHAT IS E-COMMERCE?
• E-commerce consists of the buying and selling of products or services over electronic
systems such as the Internet and other computer networks.

• E-Commerce or Electronics Commerce is a methodology of modern business, which

addresses the need of business organizations, vendors and customers to reduce cost and
improve the quality of goods and services while increasing the speed of delivery.

• E-commerce refers to the paperless exchange of business information using the

following ways:

Electronic Data Exchange (EDI)

Electronic Mail (e-mail)
Electronic Bulletin Boards

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Electronic Fund Transfer (EFT)

Other Network-based technologies

E-commerce vs. E-business

E-business:

- Digital enablement of transactions and processes within a firm, involving information

systems under firm’s control

- Does not include commercial transactions involving an exchange of value across

organizational boundaries

Features
E-Commerce provides the following features:
Non-Cash Payment: E-Commerce enables the use of credit cards, debit cards, smart
cards, electronic fund transfer via bank's website, and other modes of electronics
payment.

24x7 Service availability: E-commerce automates the business of enterprises and

the way they provide services to their customers. It is available anytime, anywhere.
Advertising/Marketing: E-commerce increases the reach of advertising of products
and services of businesses. It helps in better marketing management of
products/services.
Improved Sales: Using e-commerce, orders for the products can be generated
anytime, anywhere without any human intervention. It gives a big boost to existing
sales volumes.

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Support: E-commerce provides various ways to provide pre-sales and post-sales

assistance to provide better services to customers.
Inventory Management: E-commerce automates inventory management.
Reports get generated instantly when required. Product inventory management
becomes very efficient and easy to maintain.
Communication improvement: E-commerce provides ways for faster, efficient,
reliable communication with customers and partners.

Traditional Commerce v/s E-Commerce

Traditional Commerce E-Commerce

Heavy dependency on information Information sharing is made easy via

exchange from person to person. electronic communication channels making a
little dependency on person to person
information exchange.

Communication/transactions are done Communication or transactions can be done

in synchronous way. Manual in asynchronous way. The whole process is
intervention is required for each completely automated.
communication or transaction.

It is difficult to establish and A uniform strategy can be easily

maintain standard practices in established and maintained in e-
traditional commerce. commerce.

Communications of business In e-commerce, there is no human

depends upon individual skills. intervention.

Unavailability of a uniform platform, E-commerce websites provide the user a

as traditional commerce depends platform where all the information is
heavily on personal communication. available at one place.

No uniform platform for information E-commerce provides a universal platform

sharing, as it depends heavily on to support commercial/business activities
personal communication. across the globe.

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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)

Classified by market relationship

1. Business-to-Consumer (B2C)

The Business-to-Consumer type of e-commerce is distinguished by the establishment of

electronic business relationships between businesses and final consumers. It corresponds to the
retail section of e-commerce, where traditional retail trade normally operates.

This type of commerce has developed greatly, due to the advent of the web, and there are
already many virtual stores and malls on the Internet, which sell all kinds of consumer goods,
such as computers, software, books, shoes, cars, food, financial products, digital publications,
etc.

2. Business-to-Business (B2B)

Business-to-Business (B2B) e-commerce encompasses all electronic transactions of goods or

services conducted between companies. Producers and traditional commerce wholesalers
typically operate with this type of electronic commerce.

3. Consumer-to-Consumer (C2C)

Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic transactions of

goods or services conducted between consumers.

Classified by technology used

1. M-commerce

(mobile commerce) is the buying and selling of goods and services through wireless
technology-i.e., handheld devices such as cellular telephones and personal digital assistants
(PDAs). Japan is seen as a global leader in m-commerce.

2. Peer-to-peer (P2P)

It is a discipline that deal itself which assists people to instantly shares related computer files
and computer sources without having to interact with central web server. This kind of e-
commerce has very low revenue propagation as from the starting it has been tended to the
release of use due to which it sometimes caught involved in cyber laws.
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Payment System

E-commerce sites use electronic payment, where electronic payment refers to paperless
monetary transactions. Electronic payment has revolutionized the business processing by
reducing the paperwork, transaction costs, and labor cost. Being user friendly and less time-
consuming than manual processing, it helps business organization to expand its market
reach/expansion. Listed below are some of the modes of electronic payments:

-Cash

Credit Card
Payment using credit card is one of most common mode of electronic payment. Credit card is
a small plastic card with a unique number attached with an account. It has a magnetic strip
embedded in it that is used to read the credit card via card readers. When a customer
purchases a product via credit card, the credit card issuer bank pays on behalf of the customer
and the customer has a certain time period after which he/she can pay the credit card bill. It is
usually in the credit card monthly payment cycle. Following are the actors in the credit card
system.
holder - Customer,
- seller of product who can accept credit card payments,
- card holder's bank,
- the merchant's bank,
- for example, Visa or MasterCard.

Debit Card
Debit card, like credit card, is a small plastic card with a unique number mapped with the
bank account number. It is required to have a bank account before getting a debit card from
the bank. The major difference between a debit card and a credit card is that in case of
payment through debit card, the amount gets deducted from the card's bank account
immediately and there should be sufficient balance in the bank account for the transaction
to get completed; whereas in case of a credit card transaction, there is no such compulsion.
Smart Card
Smart card is again similar to a credit card or a debit card in appearance, but it has a small
microprocessor chip embedded in it. It has the capacity to store a customer’s work-related
and/or personal information. Smart cards are also used to store money and the amount gets
deducted after every transaction.

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E-Money
E-Money transactions refer to situation where payment is done over the network and the
amount gets transferred from one financial body to another financial body without any
involvement of a middleman. E-money transactions are faster, convenient, and saves a lot of
time.

Electronic Fund Transfer

It is a very popular electronic payment method to transfer money from one bank account to
another bank account. Accounts can be in the same bank or different banks. Fund transfer can
be done using ATM (Automated Teller Machine) or using a computer.

Advantages and Disadvantages of E-commerce

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Keys to a Successful E-commerce

1. Your ecommerce site should look good – and function properly – across platforms and
devices, especially mobile devices. When designing your ecommerce site, make sure it can be
viewed on whichever platform, browser and device your customers are using. Mobile
optimization – how quickly your site will load on a mobile device and how text and images will
look on a small screen – is particularly important as more consumers are using smartphones to
research, browse and purchase items.

2. Your ecommerce site should feel credible and trustworthy. “Be sure to have an SSL
certificate and serve up your pages via https

3. Your ecommerce site should be easy to navigate, so visitors can find what they’re
looking for with minimal clicks. The fastest way to lose a potential customer? Make it
difficult for her to find what she’s looking for. Therefore it’s critical that ecommerce businesses
make products easy to find, by having clear top-level navigation (menus) with product
categories clearly labeled and pop out subcategories.

4. Your ecommerce site should have great original photos and helpful product
descriptions.. High quality, professional photos are a must for increasing conversions.
Customers want real pictures of your actual product. If you're selling someone else’s products
it's worth it to take your own pictures and add something different to them that helps you stand
out from the competition.”

5. Your ecommerce site should feature customer reviews – and make it easy for customers
to leave reviews. Customers trust fellow customers much more than they trust retailers or
brands trying to sell them something.

6. Your ecommerce site should provide excellent customer service (and not just on the
site). A critical success factor is setting and managing the expectations for the availability and
speed of your responses… and being prepared to track, manage [and respond to] all inquiries
[in a timely fashion].”

7. Checkout should be fast and easy. “The more steps it takes for customers to pay, the
greater the chance they'll drop out. Ecommerce sites should offer a range of solutions to help
speed up payments, from one-page checkouts to recurring purchases and the ability to save card
details.

8. Your ecommerce site – and team – should be social. You may have a fabulous site, but if
no one knows about, or is talking about it, it doesn’t matter. That’s why you need to promote
your ecommerce business – and get others to promote it – on the popular social networks (i.e.,
Facebook, Twitter, Instagram and Pinterest).

Academic Disciplines Concerned with E-commerce

 Technical approach
 Computer science
 Management science
 Information systems

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 Behavioral approach
 Information systems
 Economics
 Marketing
 Management
 Finance/accounting

Examples of online shop/ E-commerce site

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