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E-Commerce

E-Commerce
referes to aspects of online
business involving exchanges
among customers, business
partners and vendors.
More simply it moves
business onto Internet.
Historical development
Electronic Data Interchange (EDI) (introduced in
the late 1970s) - computer-to-computer exchange of
structured information, by agreed message standards,
to send commercial documents like purchase orders
or invoices electronically.
Web commerce (well-known in 1994 ) the
purchase of goods and services over the World Wide
Web via secure servers with e-shopping carts and
with electronic pay services, like credit card payment
authorizations.
dot-com collapse in 2000 and 2001
Historical development
still some retailers identified valuable niche
markets and began to add e-commerce
capabilities to their Web sites.
e-commerce has unlimited potential for both
developed and developing nations.
Advantages of E-Commerce
24 x 7 operation (expensive proposition
in Brick-and-mortar [BAM] world).
Global reach
Cheaper in acquiring, serving and
retaining customers.
Disintermediation
I mproved customer service to your
clients
Advantages of E-Commerce
Places technology in the hands of
customers - screen-to-face as compared
to face-to-face.
Self-service model customer control the
interaction, doesn't get influenced by the
seller, could compare products and
control the time spend in interaction.
Advantages of E-Commerce
Knowledge of customer behavior
companies could keep track of purchases,
repeat purchase behavior, length of stays
on site, page views on a site, contents of
shopping carts, amount spent etc.
Result in network economies and
positive feedback - attempting to lock-
in customers.
Dot-coms extensions could add value
at same cost or at a lower cost. E.g.
e-procurement by an automobile
manufacturer, bank can reduce the
need for physical branches by e-
banking.
Value for money for e.g. products
available on rediff.com are available at
20-50 % discount and the opportunity to
compare prices is just a click away.
No-entry barrier does not need big
investment to be successful. For e.g.
amazon.com grew from nothing to become
largest bookseller.
Limitations of E-Commerce
Difficult to inspect from a remote location
Newness and rapidly developing pace of
underlying technologies
Technology based customer interface
Difficult to calculate the return-on-investment.
May not be good for:
perishable foods
high cost items (such as jewellery, antiques)
Difficulty of integrating existing
databases and transaction processing
software into a software that enables e-
commerce.
Cultural and legal obstacles cyber laws
not developed fully.
Fear of sending credit card numbers over
the Internet
Resistant to change and are
uncomfortable viewing merchandise on a
computer screen rather than in person
Difficulties in International
e-commerce
In international business
Legal - Political laws
Currency conversions
Taxes Tariffs on businesses.
Import and export restrictions
Privacy local business customs of
each country
Transition to e-commerce in India
Enormous potential owing to rapid growth of
the number of Internet users.
Technological advances will be driving factor
NASSCOM (National Association of Software
and Services Companies) findings of its survey
to evaluate e-commerce scenario in India
E-Commerce is dependent to a great extent on the
number of internet users in India.
Rate of growth of Internet users
(in thousands) in India
0
5000
10000
15000
20000
25000
30000
35000
40000
2000 2001 2002 2003 2004 2005 2006
Internet users in
thousands
source: www.nascom.org
Internet and India
More than 75 % of the revenues from
transactions, smaller amount through
advertising.
Total volume of e-commerce transactions
in India was Rs. 450 crores in 1999-2000
Out of this Rs. 50 crore by retail internet
Rs. 400 crore business to business.
Total E-Commerce transaction in
India
0
1000
2000
3000
4000
5000
6000
7000
1998-
1999
1999-
2000
2000-
2002
2006 2007
Total e-commerce
transactions in Rs.
Crore
source: www.nascom.org
E-Commerce Opportunities
Commercial
Property Transactions - estate dealers,
builders, housing finance companies offer
their products.
Sale, Purchase of Goods consumers
could buy products, industries can procure
raw-materials, components etc.
Manufacturers and sellers could sell their
products.
Delivery of Goods for example computer
software could be directly downloaded by
the customer.
Electronic payments through credit cards,
debit cards, electronic transfer etc.
Banking and Money Transfer online
banking, ATM.
Import and Export facilitated by e-
commerce.
Insurance business consumers could
enquire about insurance products, can
subscribe to a policy through internet.
Transportation could be arranged and
monitored through Internet.
Online Share Trading buying, transfer of
shares.
Tourism and hotel industry could know
about tourist destinations, book tickets, check
accommodation in hotels.
Payment of taxes is possible electronically.
Payment of services like telephone,
electricity, water, insurance premium, fee etc.
Renewal of licenses could be done on
Internet.
Social Services
Online Education and distant learning
and training take lessons, interact with
teachers through videoconferencing,
download study material etc.
Online Diagnosis and Treatment by
doctors through videoconferencing.
Sharing Research - in different parts of the
world through different models of e-
commerce.
Filling of Income Tax Return by Finance
Act, 2002 03.
Entertainment opportunities
Ticketing of Theaters, Cinema Halls,
Concerts
Online Games
TELCO Managing Supply Chain
on the Internet
Tata Engineering and Locomotive Engineering
Company (TELCO) Indias largest
commercial vehicle manufacturer
started connecting its 130-strong dealer
network online with companys Internet-based
system
Group company Tata Technologies Ltd.
developed the interfaces with back-end ERP
systems.
The Internet based system currently covers the
companies manufacturing locations at Pune,
Jamshedpur and Lucknow and its headquaters
at Mumbai.
Rs. 3 crore investment over 8 years.
Expected to cut down the transaction time at
dealer end by 50%.
More accurate and secured information
Dealers would receive supplies much faster,
keep their inventories under control
Customize products according to dealer
requirements at a shorter notice.
Hindustan Lever getting the E-
Advantage
HUL has wired up all its 7500
distributors
From its 2 million retail outlets the
company is trying to connect its top
retailers
Finally it also plans to use Internet
for transactions e-tailing.
ICICI Bank
Using Internet to acquire more customers.
Wants that account holders could do all
their money transactions over the
Internet.
Demat Account
Online trading
Electronic bill payment service through
its Internet banking service
ITC e-Choupal
web based initiative of ITC international business
division
offers the farmers of India all information, products
and services they need to enhance farm productivity
and cut transaction costs.
Existing supply chain
Village -> Mandi -> ITC Factory/ Warehouse
Farmers had only one option to sell to mandi which is
disorganized and run by middlemen, who cheat
farmers in terms of weight and price.
ITC concept
Each village was provided with a computer
kiosk containing PC/Connection lines/UPS
powered by solar energy and a printer.
farmers could access latest local and global
information on weather, scientific farming
practices, as well as market prices at the
village itself through this Web portal all in
Hindi.
System developed by ITC Infotech India Ltd.
Using Microsoft technologies primarily ASP
and VB components. HTML for presentation
and RDBMS at the backend.
EXERCISES
Make a study of
HDFC banking services on the
I nternet
BLUE DART rapid delivery through
I nternet