Dr Nael Qtati

Introduction to
E-commerce
Week 1: Starting 17th September 2022
nqtati@iugaza.edu
It is not allowed to copy, edit or use this
material without a written consent.
Chapter 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.
Uber, headquartered in San Francisco, was founded in 2009 and has grown
explosively since then to over 900 major cities and thousands of smaller ones in 69
countries. In 2019, Uber had 3.9 million drivers worldwide and over 110 million
monthly active riders who made 6.9 billion trips during the year. In 2019, those riders
spent $65 billion on the Uber platform, generating $14.1 billion in revenue for Uber.
Why You Should Study E-commerce
● The “Uberization” of E-commerce
Critics fear the long-term impact of on-demand service firms, because of their
potential for creating a society of part-time, low-paid, temp work, displacing
traditionally full-time, secure jobs—the so-called “uberization” of work. Uber is not
the Uber for rides so much as it is the Uber for low-paid jobs.
● Uber drivers’ median profit was only $3.37 per hour.
● In 1994, e-commerce as we now know it did not exist. In 2020, just over 25 years.
later, around 2.3 billion consumers spent about over $5 trillion, and businesses
almost $27 trillion, purchasing goods and services via a desktop computer or
mobile device.
Introduction to eCommerce
● E-commerce can be defined as digitally enabled commercial transactions between and
among organizations and individuals.
● The Internet is a worldwide network of computer networks built on common standards.
● The Web is one of the Internet’s most popular services, providing access to billions of web
pages.
● An app is a software application. The term is typically used when referring to mobile
applications, although it is also used to refer to desktop computer applications as well.
● A mobile browser is a version of web browser software accessed via a mobile device.
● E-business is the digital enabling of transactions and processes within a firm, involving
information systems under the control of the firm.
Introduction to eCommerce
● It took radio 38 years to achieve a 30% share of U.S. households. It took television 17 years
to achieve a 30% share. It took only 10 years for the Internet/Web to achieve a 53% share of
U.S. households.
● Web pages are created in a language called HTML (HyperText Markup Language). HTML
pages can contain text, graphics, animations, and other objects.
Major Trends: Business
● The Covid-19 pandemic fuels a surge in retail e-commerce and m-commerce.
● The mobile app ecosystem continues to grow, with almost 2.8 billion people worldwide using
mobile apps.
● Social e-commerce, based on social networks and supported by advertising, emerges and
continues to grow, generating an estimated $90 billion worldwide in 2020.
● On-demand service firms continue to attract billions in capital and garner multi-billion dollar
valuations.
● Mobile advertising continues growing at astronomical rates, accounting for over 70% of all
digital ad spending.
● Small businesses continue to flood into the e-commerce marketplace, often riding on the
infrastructures created by industry giants such as Apple, Facebook, Amazon, Google, and
eBay.
Major Trends: Technology
● A mobile computing and communications platform based on smartphones, tablet computers,
wearable devices, and mobile apps becomes a reality. The use of mobile messaging services
such as Facebook Messenger, WhatsApp, and Snapchat continues to expand, and these
services are now used by almost 45% of the U.S. population.
● Cloud computing completes the transformation of the mobile platform by storing consumer
content and software on “cloud”.
● The Internet of Things (IoT), comprised of billions of Internet-connected devices.
● As firms track the trillions of online interactions that occur each day, a flood of data, typically
referred to as big data, is being produced.
● In order to make sense out of big data, firms turn to sophisticated software called business
analytics that can identify purchase patterns, interests and intentions in milliseconds.
Major Trends: Society
● User-generated content, published online as social network posts, tweets, blogs, and pins,
continues to grow and provides a method of self-publishing that engages millions.
● Social networks threatening privacy, as Facebook comes under fire for allowing third parties
such as Cambridge Analytica, to mine its database of user information without user consent.
● The EU GDPR impacts all companies that operate in any of the EU member nations.
● Concerns increase about increasing market dominance of Facebook, Amazon, and Google.
● Surveillance of online communications by both repressive regimes and Western democracies.
● Concerns over commercial and governmental privacy invasion increase.
● Online security continues to decline as companies are hacked and lose control over data.
● Spam remains a significant problem.
● On-demand service e-commerce produces a flood of temporary, poorly paid jobs without
benefits.
Will Apps Make the
Web Irrelevant?

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Unique Features of eCommerce Tech
Unique Features of eCommerce Tech
● Ubiquity: it is available just about everywhere, at all times. It liberates the market from being
restricted to a physical space and makes it possible to shop from your desktop, at home, at
work, or even from your car, using mobile e-commerce.
● Global Reach: E-commerce technology permits commercial transactions to cross cultural,
regional, and national boundaries far more conveniently and cost-effectively than is true in
traditional commerce. As a result, the potential market size for e-commerce merchants is
roughly equal to the size of the world’s online population
● One unusual feature of e-commerce technologies is that the technical standards of the Internet,
and the technical standards for conducting e-commerce, are universal standards.
● Social Technology: Traditional media used a broadcast model (one-to-many). E-commerce
depends on user generated content.
Unique Features of eCommerce Tech
● Richness: E-commerce technologies have the potential for offering considerably more
information richness than traditional media such as printing, radio, and television because they
are interactive and can adjust the message to individual users.
● Interactivity: technology that allows for two-way communication between merchant and
consumer.
● E-commerce technologies vastly increase information density—the total amount and quality of
information available to all market participants, consumers, and merchants.
● Personalization is the targeting of marketing messages to specific individuals by adjusting the
message to a person’s name, interests, and past purchases.
● Customization is changing the delivered product or service based on a user’s preferences or
prior behavior.
Unique Features of eCommerce Tech
● Richness: E-commerce technologies have the potential for offering considerably more
information richness than traditional media such as printing, radio, and television because they
are interactive and can adjust the message to individual users.
● Interactivity: technology that allows for two-way communication between merchant and
consumer.
● E-commerce technologies vastly increase information density—the total amount and quality of
information available to all market participants, consumers, and merchants.
● Personalization is the targeting of marketing messages to specific individuals by adjusting the
message to a person’s name, interests, and past purchases.
● Customization is changing the delivered product or service based on a user’s preferences or
prior behavior.
Types of eCommerce
● Business-to-consumer (B2C) e-commerce, in which online businesses attempt to reach
individual consumers. B2C e-commerce includes purchases of retail goods; travel, financial,
real estate, and other types of services; and online content.
Types of eCommerce
● Business-to-business (B2B) e-commerce, in
which businesses focus on selling to other
businesses, is the largest form of
e-commerce, with almost $8 trillion in
transactions in the United States in 2020 and
about $27 trillion worldwide. This is still a
small portion of total B2B commerce (which
remains largely non-automated), suggesting
that B2B e-commerce has significant growth
potential. The ultimate size of B2B
e-commerce is potentially huge.
Types of eCommerce
● Consumer-to-consumer (C2C) e-commerce provides a way for consumers to sell to each other
with the help of an online market maker (also called a platform provider).

● Mobile e-commerce (m-commerce)

refers to the use of mobile devices
to enable online transactions.
Types of eCommerce
● Social e-commerce is e-commerce that is enabled by social networks and online social
relationships. Enabled by social sign-on, network notification, online collaborative shopping
tools, social search, integrated social commerce tools such as Buy buttons, Shopping tabs,
marketplace groups, and virtual shops on Facebook, Instagram, and other social networks.
● Local e-commerce, is a form of e-commerce that is focused on engaging the consumer based
on his or her current geographic location.
Types of eCommerce
● Social e-commerce is e-commerce that is enabled by social networks and online social
relationships. Enabled by social sign-on, network notification, online collaborative shopping
tools, social search, integrated social commerce tools such as Buy buttons, Shopping tabs,
marketplace groups, and virtual shops on Facebook, Instagram, and other social networks.
● Local e-commerce, is a form of e-commerce that is focused on engaging the consumer based
on his or her current geographic location.
Types of eCommerce
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Understanding e-Commerce
● Technology: Infrastructure
At the core of e-commerce are the Internet and
the Web. Underlying these technologies are a
host of complementary technologies: cloud
computing, desktop computers, smartphones,
tablet computers, local area networks,
relational and nonrelational databases,
client/server computing, data mining, and
fiber-optic switches.
Understanding e-Commerce
● Business: Basic Concepts
New technologies present businesses and entrepreneurs with new ways of organizing
production and transacting business. New technologies change the strategies and plans of
existing firms: old strategies are made obsolete and new ones need to be invented. New
technologies are the birthing grounds where thousands of new companies spring up with new
products and services. New technologies are the graveyard of many traditional businesses.
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Academic Areas Concerned with eCom.
● Technical Approach
Computer scientists concerned with the development of computer hardware, software, and
telecommunications systems, as well as standards, encryption, and database design and
operation. Operations management scientists are primarily interested in building mathematical
models of business processes and optimizing these processes. The information systems
discipline spans the technical and behavioral approaches. Technical groups within the
information systems specialty focus on data mining, search engine design, and artificial
intelligence.
Academic Areas Concerned with eCom.
● Behavioural Approach
- information systems researchers are primarily interested in e-commerce because of its
implications for firm and industry value chains, industry structure, corporate strategy.
- Economists have focused on online consumer behavior, pricing of digital goods, and on
the unique features of digital electronic markets.
- The marketing profession is interested in marketing, brand development and extension,
online consumer behavior, and the ability of e-commerce technologies to segment and
target consumer groups, and differentiate products.
- Management scholars have focused on entrepreneurial behavior and the challenges
faced by young firms who are required to develop organizational structures in short
time spans.
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 Thank you nqtati@iugaza.edu

It is not allowed to copy, edit or use this material without a written consent