E-commerce 2021: Business. Technology. Society.

Sixteenth Edition
Chapter 1

The Revolution
Is
Just
Beginning

MA. Pham Thi Chau Quyen

FTU
Copyright © 2022, 2019, 2018 Pearson Education, Inc. All Rights Reserved
Learning Objectives
• 1.1 Understand why it is important to study e-commerce.
• 1.2 Define e-commerce, understand how e-commerce differs from
e-business, identify the primary technological building blocks
underlying e-commerce, and recognize major current themes in e-
commerce.
• 1.3 Identify and describe the unique features of e-commerce
technology and discuss their business significance.
• 1.4 Describe the major types of e-commerce.
• 1.5 Understand the evolution of e-commerce from its early years to
today.
• 1.6 Describe the major themes underlying the study of e-commerce.
• 1.7 Identify the major academic disciplines contributing to e-
commerce.
The First Thirty Seconds
• First two decades of e-commerce
• Just the beginning
• Rapid growth and change
• Technologies evolve at exponential rates
• Disruptive business change
• New opportunities
• Why study e-commerce
• Understand opportunities and risks
• Analyze e-commerce ideas, models, issues
C1 The Revolution Is Just Beginning
Introduction to E-commerce
1 - Definitions
- E-commerce vs E-business
- Understanding E-commerce: Business-Technology-Society

History of E-commerce
2 - A Brief History
- Technological Building Blocks Underlying E-commerce
- Major Trends in E-commerce

3 Unique Features of E-commerce

4 Types of E-commerce
- B2B, B2C, C2C

5 Benefits and Limitations of E-commerce

Pham Thi Chau Quyen
1.1 Introduction to E-commerce

(1) Definitions
Use of Internet to transact business

Includes Web, mobile browsers and apps

More formally:

Digitally enabled commercial transactions

between and among organizations and individuals

(E-commerce, Laudon, 2021)

Pham Thi Chau Quyen

1.1 Introduction to E-commerce

(1) Definitions
E-commerce activity means
conducting part or the whole of the
process of commercial activity
by electronic means
connected to the Internet, mobile
telecommunications network or
other open networks.
(Item 1, Article 3, Decree on E-commerce, No.
52/2013/ND-CP)
Pham Thi Chau Quyen
 (i) COMMERCIAL ACTIVITIES

Commercial activities mean activities for the

purpose of generating profits, including:
sale and purchase of goods, provision of services,
investment, commercial promotion and other activities
for the profit purpose.
Source: Clause 1, Article 3, Commercial law,
No. 36/2005/QH11
 (ii) ELECTRONIC MEANS

An electronic means is a means that

operates based on electric, electronic,
digital, magnetic, wireless, optical,
electro-magnetic technologies or similar
technologies.
Source: Clause 10, Article 4, Law on e-transactions,
No. 51/2005/QH11
(ii) ELECTRONIC MEANS
(iii) TELECOMUNICATION NETWORKS

TELECOMMUNICATION

TELE (Prefix) + COMMUNICATION

(iii) TELECOMUNICATION NETWORKS

§ Telephone networks;
§ Television networks;
§ Intranet;
§ Extranet;
§ Internet;
§ 3G networks;
§ 4G networks;
§ 5G networks
§….
Pham Thi Chau Quyen
1.1 Introduction to E-commerce

Product

Goods Service

Online arrangements

Traditional goods Efficient distribution

Digital goods Direct distribution

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1.1 Introduction to E-commerce

Soure: UNCTAD (United Nations Conference

on Trade and Development )

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1.1 Introduction to E-commerce

(2) E-commerce vs E-business

Pham Thi Chau Quyen

 E-commerce vs E-business

Electronic commerce (e-commerce): All

electronically mediated information exchanges
between an organization and its external
stakeholders.

Electronic business (e-business): All

electronically mediated information
exchanges, both within an organization and
with external stakeholders supporting the
range of business processes.
à e-commerce can best be conceived
of as a subset of e-business

Pham Thi Chau Quyen

E-commerce vs E-business

Pham Thi Chau Quyen

 E-commerce vs E-business

• E-business:
• Digital enabling 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

Pham Thi Chau Quyen

E-commerce vs E-business
 E-COMMERCE ORGANIZATIONS

1. Brick and mortar organizations: offline actitivitie

2. Virtual (pure-play) organizations: online actitivities
E-tailer

3. Click and mortar (click and brick) organizations:

offline actitivities + online actitivities
 E-COMMERCE ORGANIZATIONS

Pure e-commerce Partial e-commerce

A company will sell a good

Everything happens on
through the internet but the
the Internet
fulfilment of the goods will
need to take place in the
"real"
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Omni-channel vs Multi-channel

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 (1) xây dựng hệ thống lõi
(2) phát triển các kênh bán hàng

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1.1 Introduction to E-commerce

(3) 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

Pham Thi Chau Quyen

1.2 History of E-commerce

(1) A brief history

Pham Thi Chau Quyen

E-commerce: A Brief History (1 of 4)
• Precursors
• Baxter Healthcare modem-based system (1970s)
• Order entry systems (1980s)
• Electronic Data Interchange (EDI) standards (1980s)
• French Minitel (1981)
E-commerce: A Brief History (2 of 4)
• 1995–2000: Invention
• Sale of simple retail goods
• Limited bandwidth and media
• Euphoric visions of
§ Friction-free commerce
§ First-mover advantages
• Dot-com crash of 2000
E-commerce: A Brief History (3 of 4)
• 2001–2006: Consolidation
• Emphasis on business-driven approach
• Traditional large firms expand presence
• Start-up financing shrinks
• More complex products and services sold
• Growth of search engine advertising
• Business web presences expand
E-commerce: A Brief History (4 of 4)
• 2007–Present: Reinvention
• Rapid growth of:
§ Web 2.0, including online social networks
§ Mobile platform
§ Local commerce
§ On-demand service economy
• Entertainment content develops as source of
revenues
• Transformation of marketing
Figure 1.11 The Internet and the Evolution of
Corporate Computing
Insight on Society: Facebook and the Age of Privacy

• Class discussion:
• Why are social networks interested in collecting user
information?
• What types of privacy invasion are described in the
case? Which is the most privacy-invading, and why?
• Was the FTC’s $5 billion fine and its placement of
new restrictions on Facebook’s business operations
sufficient in light of Facebook’s history with respect to
privacy violations?
• How do you protect your privacy online?
Academic Disciplines Concerned with Technology
• Technical
• Computer science, management science,
information systems
• Behavioral
• Information systems research, economics,
marketing, management, finance/accounting,
sociology
Figure 1.10 Periods in the Development of E-
commerce
Pham Thi Chau Quyen
GOOGLE DATA CENTER

How big is Google's data center?

Pham Thi Chau Quyen

Pham Thi Chau Quyen
Pham Thi Chau QuyenSOURCES: E-commerce-Laudon
The first image on the Internet

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 EMAIL HISTORY

Raymond Tomlinson
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 FIRST EMAIL

The first email message was "QWERTYUIOP".

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FIRST EMAIL

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The First Item Listed on eBay was
a Broken Laser Pointer
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Insight on Business: Y Combinator’s Startup Boot
Camp

• Class Discussion
• Why do you think investors today are still interested
in investing in startups?
• What are the benefits of investing in a company that
is a graduate of a Y Combinator boot camp?
• Is an incubator the best solution for startups to find
funding? Why or why not?
Assessing E-commerce (1 of 2)
• Stunning technological success
• Early years a mixed business success
• Few early dot-coms have survived
• Online sales growing rapidly
• Many early visions not fulfilled
• Price dispersion
• Information asymmetry
• New intermediaries
Assessing E-commerce (2 of 2)
• Other surprises
• Fast-follower advantages
• Start-up costs
• Impact of mobile platform
• Emergence of on-demand e-commerce
1.2 History of E-commerce

(2) Technological Building Blocks Underlying E-commerce

• Internet
• World Wide Web
• HTML
• Deep Web v s “surface” Web
ersu

• Mobile platform
• Mobile apps

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Insight on Technology: Will Apps Make the Web
Irrelevant?

• Class Discussion
• What are the advantages and disadvantages of
apps, compared with websites, for mobile users?
• What are the benefits of apps for content owners
and creators?
• What are progressive web apps (PWAs) and how
do they differ from native apps?
• Will apps eventually make the Web irrelevant?
Why or why not?
1.2 History of E-commerce

(3) Major Trends in E-commerce

• Business trends include:
• Covid-19 pandemic fuels surge in retail e-commerce,
m-commerce, and certain on-demand services
• Technology trends include:
• Mobile platform and cloud computing
• Big data and Internet of Things
• Societal trends include:
• Increased concern about impact of social networks
• Concerns about increasing market dominance of big
technology firms
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1.2 Unique Features of E-commerce

1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology

Pham Thi Chau Quyen

 8 key features of e-commerce
Internet/Web is available everywhere: at work, at home
Ubiquity
and elsewhere via mobile devices, anytime
The technology reaches across national boundaries,
Global reach
around the Earth
There is one set of technology standards, namely
Universal standards
Internet standards

Richness Video, audio and text messages are possible

Interactivity The technology works through interaction with the user

The technology reduces information costs and raises

Information density
quality
Personalization/ The technology allows personalized messages to be
Customization delivered to individuals as well as groups

Social technology User content generation and social networking

 ELEMENTS of COMMERCE
• You need a product or service to sell
• You need a place from which to sell the products
• You need to figure out a way to get people to come to
your place.
• You need a way to accept orders.
• You also need a way to accept money.
• You need a way to deliver the product or service, often
known as fulfillment.
• Sometimes customers do not like what they buy, so you
need a way to accept returns.
• You need a customer service and technical support
department to assist customers with products.
1.3 Types of E-commerce

• Business-to-Consumer (B2C)
• Business-to-Business (B2B)
• Consumer-to-Consumer (C2C)
• Mobile e-commerce (M-commerce)
• Social e-commerce
• Local e-commerce

Pham Thi Chau Quyen

Figure 1.5 The Growth of B2C E-commerce in the
United States
Figure 1.7 The Growth of B2B E-commerce in the
United States
Figure 1.8 The Growth of M-commerce in the
United States
1.5 Benefits and Limitations of E-commerce

TO ORGANIZATION

TO
CUSTOMER

TO
SOCIETY

Pham Thi Chau Quyen

 (1) BENEFITS

Reduce cost,
Increase revenue

Build and develop

To the
customer
organization
relationship

Create
customization
 (1) BENEFITS

Lower price

To the Why online product may be

customer cheaper than traditional ones?

More
convenience
 (1) BENEFITS

Why online product may be cheaper

than traditional ones?
 (1) BENEFITS

More online activities

-> result?

To the Public services are

society provided better

Get knowledge from

developed society
 (2) LIMITATIONS

LIMITATIONS

TECHNICAL COMMERCIAL
LIMITATIONS LIMITATIONS
 (i) TECHNICAL LIMITATIONS

q costs of a technological solution

q Lack of universal standards for
quality, security, and reliability.
q insufficient bandwidth

q software tools are not fixed

q e-payment
(ii) NON-TECHNICAL LIMITATIONS

v privacy and security issues

v customer expectations unmet
v legal environment
v cultural obstacles
v delivery