Slide 1.

E-COMMERCE
Slide 1.2

Introduction
 Organizations have now been applying technologies
based on the Internet, World Wide Web and
wireless communications to transform their
businesses for over 15 years since the creation of
the first web site (http://info.cern.ch) by Sir Tim
Berners-Lee in 1991.
 Deploying these technologies has offered many
opportunities for innovative e-businesses to be
created based on new approaches to business.
Slide 1.3

 E-commerce (electronic commerce) is the

buying and selling of goods and
services, or the transmitting of funds or
data, over an electronic network,
primarily the internet.
 These business transactions occur either as
business-to-business (B2B), business-to-
consumer (B2C), consumer-to-consumer or
consumer-to-business.
Slide 1.4

Advantages and disadvantages of e-

commerce
 Availability. Aside from outages or scheduled
maintenance, e-commerce sites are available 24x7,
allowing visitors to browse and shop at any time.

 Speed of access. While shoppers in a physical store can

be slowed by crowds, e-commerce sites run quickly, which
is determined by compute and bandwidth considerations on
both consumer device and e-commerce site. Product pages
and shopping cart pages load in a few seconds or less. An
e-commerce transaction can comprise a few clicks and take
less than five minutes.
Slide 1.5

 Wide availability. Amazon's first slogan was "Earth's Biggest

Bookstore." They could make this claim because they were an e-
commerce site and not a physical store that had to stock each book
on its shelves. E-commerce enables brands to make a wide array of
products available, which are then shipped from a warehouse after a
purchase is made. Customers will likely have more success finding
what they want.

 Easy accessibility. Customers shopping a physical store may have a

hard time determining which aisle a particular product is in. In e-
commerce, visitors can browse product category pages and use the
site search feature the find the product immediately.

 International reach. Brick-and-mortar businesses sell to customers

who physically visit their stores. With e-commerce, businesses can
sell to any customer who can access the web. E-commerce has the
potential to extend a business.
Slide 1.6

 Lower cost. pure play e-commerce businesses

avoid the cost associated with physical stores, such
as rent, inventory and cashiers, although they may
incur shipping and warehouse costs.
 Personalization and product recommendations.
E-commerce sites can track visitors' browse, search and
purchase history. They can use this data to present
useful and personalized product recommendations, and
obtain valuable insights about target markets. Examples
include the sections of Amazon product pages labeled
"Frequently bought together" and "Customers who
viewed this item also viewed."
Slide 1.7

 Year Company / site Category of innovation and business

model Founded:
 1994 Amazon Retailer.
 1995 (March) Yahoo! (yahoo.com) Directory and portal.
 1995 (Sept) eBay Online auction.
 1995 (Dec) AltaVista (altavista.com) Search engine.
 1996 Hotmail (hotmail.com) Web-based e-mail,Viral
marketing (using e-mail signatures to promote
service),Purchased by Microsoft in 1997.
 1998 GoTo.com (goto.com) Pay-per-click search
marketing.
 Overture (2001) Purchased by Yahoo! in 2003.
 1998 Google (google.com) Search engine.
 1999 Blogger (blogger.com) Blog publishing platform
Purchased by Google in 2003.
 1999 Alibaba (alibaba.com) B2B marketplace with $1.7
billion IPO on Hong Kong stock exchange in 2007.
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 1999 MySpace (myspace.com) Social network.

 Formerly eUniverse Purchased by News Corp in 2005.
 2001 Wikipedia (wikipedia.com) Open encyclopedia.
 2002 Last.fm A UK-based Internet radio and music
community web site,founded in 2002. On 30 May 2007,
CBS Interactive acquired Last.fm for £140m
(US$280m).
 2003 Skype (skype.com) Peer-to-peer Internet
telephony VoIP – Voice over Internet protocol.
 Purchased by eBay in 2005, 2003.
 Second Life (secondlife.com) Immersive virtual world.
 2004 Facebook (facebook.com) Social network
applications and groups.
 2005 YouTube (youtube.com) Video sharing and rating
 2007 Joost (joost.com) Quality video broadcast
service.
 IPTV – Internet Protocol TV.
 ?? The future ??
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 How does e-commerce work?

 E-commerce is powered by the internet,
where customers can access an online
store to browse through, and place
orders for products or services via their
own devices.
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The impact of the Internet on business

 Andy Grove, Chairman of Intel, one of the
early adopters of e-commerce, has made a
meteorological analogy with the Internet. He
says:
Is the Internet a typhoon force, a ten times
force, or is it a bit of wind? Or is it a force
that fundamentally alters our business?
(Grove, 1996)
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E-business opportunities

 Reach
 Over 1 billion users globally
 Connect to millions of products
 Richness
 Detailed product information on 20 billion + pages
indexed by Google. Blogs, videos, feeds…
 Personalized messages for users
 Affiliation
 Partnerships are key in the networked economy
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E-commerce:
1 A communications perspective – the delivery
of information, products or services or payment
by electronic means.
2 A business process perspective – the
application of technology towards the
automation of business transactions and work-
flows.
3 A service perspective – enabling cost cutting
at the same time as increasing the speed and
quality of service delivery.
4 An online perspective – the buying and
selling of products and information online.
Slide 1.13

E-business:
Electronic business (e-business)
All electronically mediated information
exchanges, both within an organization and with
external stakeholders supporting the range of
business processes.
Slide 1.14

Buy-side e-commerce and Sell-side

e-commerce
 Buy-side e-commerce
E-commerce transactions between a
purchasing organization and its suppliers.
 Sell-side e-commerce
E-commerce transactions between a supplier
organization and its customers.
Slide 1.15

E-commerce refers to buying and selling online,

while E-business encompasses all business
conducted online.

E- Commerce E-business
• Buying and selling product online Online store setup
• Online ticketing Customer education
• Online Payment Buying and selling product
• Paying different taxes Monetary business transaction
• Online accounting software Supply Chain Management
• Online customer support E-mail marketing
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S.
No. E-COMMERCE E-BUSINESS

E-Commerce refers to the

performing online commercial
01.
activities, transactions over
internet.
E-Commerce is a narrow concept
02. and it is considered as a subset of
E-Business.
Commercial transactions are
03.
carried out in e-commerce.
In e-commerce transactions are
04.
limited.
It includes activities like buying
and selling product, making
05.
monetary transactions etc over
internet.
E-Business refers to performing all
type of business activities through
internet.
E-Business is a broad concept and it is
considered as a superset of E-
Commerce.
Business transactions are carried out
in e-business.
In e-business transactions are not
limited.
It includes activities like procurement of
raw materials/goods, customer
education, supply activities buying and
selling product, making monetary
transactions etc over internet.
Slide 1.17

It requires the use of multiple websites,

It usually requires the use of only
CRMs, ERPs that connect different
a website.
business processes.
It involves mandatory use of It involves the use of internet, intranet
internet. or extranet.
E-commerce is more appropriate
E-business is more appropriate in
in Business to Customer (B2C)
Business to Business (B2B) context.
context.
E-Commerce covers
E-Business covers internal as well as
outward/external business
external business process/activities.
process.
Slide 1.18

Figure 1.4 The relationship between intranets, extranets and the Internet
Slide 1.19

Intranet and Extranet

 Intranet :
A private network within a single company using
Internet standards to enable employees to
access and share information using web
publishing technology.
 Extranet :
A service provided through Internet and web
technology delivered by extending an intranet
beyond a company to customers, suppliers
and collaborators.
Slide 1.20

Figure 1.8 Summary and examples of transaction alternatives between

businesses, consumers and governmental organizations
Slide 1.21

Types of E-commerce
 Business-to-Consumer (B2C)
 Business-to-Business (B2B)
 Consumer-to-Consumer (C2C)
 Social e-commerce
 Mobile e-commerce (M-commerce)
 Local e-commerce

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Education, Inc. Slide 1-21
Business-to-Consumer (B2C) E-
Slide 1.22

commerce
The most commonly discussed type of e-commerce
is business-to-consumer (B2C) e-commerce, in
which online businesses attempt to reach individual
consumers. B2C commerce includes purchases of
retail goods, travel services, and online content.

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Education, Inc. Slide 1-22
Slide 1.23

The Growth of B2C E-commerce

Slide 1-23
Slide 1.24

Business-to-business (B2B) e-commerce

In which businesses focus on selling to other
businesses, is the largest form of e-commerce.

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Education, Inc. Slide 1-24
Slide 1.25

The Growth of B2B E-commerce

Figure 1.2, Page 14

SOURCE: Based on data from U.S. Census Bureau, 2012b; authors’ estimates.
Copyright © 2014 Pearson
Education, Inc. Slide 1-25
Slide 1.26

Consumer-to-consumer (C2C)
e-commerce provides a way for consumers to
sell to each other, with the help of an online
market maker such as eBay or Etsy, or the
classifieds site Craigslist.

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Education, Inc. Slide 1-26
Slide 1.27

Social e-commerce
is e-commerce that is enabled by social
networks and online social relationships. It is
sometimes also referred to as Facebook
commerce, but in actuality is a much larger
phenomenon that extends beyond just
Facebook.

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Education, Inc. Slide 1-27
Slide 1.28

Mobile e-commerce (M-commerce)

use of mobile devices to enable transactions on
the Web

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Education, Inc. Slide 1-28
Slide 1.29

local e-commerce
e-commerce that is focused on engaging the consumer
based on his or her current geographic location.

Groupon offers subscribers daily deals from local

businesses in the form of “Groupons,” discount coupons that
take effect once enough subscribers have agreed to
purchase.

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Education, Inc. Slide 1-29
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The Internet
 Worldwide network of computer networks built
on common standards
 Created in late 1960s
 Services include the Web, e-mail, file
transfers, etc.
 Can measure growth by looking at number of
Internet hosts with domain names

Slide 1-30
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The Web
 Most popular Internet service
 Provides access to Web pages
 HTML documents that may include text, graphics,
animations, music, videos
 Web content has grown exponentially
 Google reports one trillion unique URLs; 120 billion
Web pages indexed

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Education, Inc. Slide 1-31
Slide 1.32

Understanding E-commerce:
Organizing Themes
 Technology:
 Development and mastery of digital computing and
communications technology
 Business:
 New technologies present businesses with new ways
of organizing production and transacting business
 Society:
 Intellectual property, individual privacy, public welfare
policy

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Education, Inc. Slide 1-32