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E-Commerce

Thuyduong Nguyen
IT 3700-02 Spring 2003
April 28, 2003

Introduction

E-Commerce is sharing business information, maintaining


business relationships and conducting business transaction
by means of telecommunications network

It is conducting the exchange of information using a


combination of structures and unstructured messages
across the entire range of networking technologies

The Internets WWW has been the prime driver of


contemporary E-commerce

E-commerce enables organizations of all sizes and in all


market sectors to improve their competitiveness

Traditional vs.
Electronic

Traditional commerce:

Firms engages in many


other activities in
addition to buying and
selling their product

Traditional commerce
include: buyers and
sellers using old fashion
method to do business

Electronic Commerce:

Firms has used various


electronic communications
tools to conduct different
kinds of business
transactions.

Electronic Commerce use


technology to moves
people around the world

Advantages of E-

Commerce

Increase sales and decrease sales costs

A small firm's promotional message out to potential


customers in every country in the world with good ad

Reach narrow market segments that are


geographically scattered

Increases sales opportunities for seller, it also increases


purchasing opportunities for the buyers

Businesses can identify new suppliers and business


partners

Provides buyers with a wide range of choices than


traditional commerce

Benefits for general


welfare of society:

Electronic payments of tax refund, public retirement,


and welfare support cost less to issue and arrive
securely and quickly when transmitted over the
Internet

Electronic payments can be easier to audit and


monitor than payments made by check, providing
protection against fraud and theft losses

Electronic commerce enables people to work form


home

Disad. of Electronic
Commerce:

Many products and services require that a critical mass of


potential buyers be equipped and willing to buy through the
Internet.
Costs and benefits have been hard to quantify
Many firms have had trouble recruiting and retaining
employees with the technological, design, and business
process skills needed to create an effective electronic
commerce
Firms also have difficulty of integrating existing database and
transaction-processing software designed for traditional
commerce into the software that enables electronic commerce
Firms also face cultural and legal obstacles to conducting
electronic commerce

Main Areas of ECommerce


Business to Business (B2B)
Business to Consumer (B2C)
Business to Government/Government to
Business (B2G/G2B)

Benefits of ECommerce

The market for a Web based is not bound by any geographical


constraints

The transaction cost go down tremendously in a well set up site

Better, more inviting, convenient and comprehensive


presentation of goods is conducive to greater sales

Small and large firms alike have the opportunity to set-up and
conduct business on the internet.

An inexpensive advertising medium for organizations, it allows


organizations an opportunity for publicizing their
products and services at minimal cost.

Barriers to ECommerce
1. Access and Connectivity
2. Authentication and Standardization
3. Cyber Laws
4. Technology

Promise & Threat

Impact and Issues of Electronic Commerce


1.

The business, societal, and research problematic of E-commerce


spans an immense range, which reflects the depth of change being
caused by this rapidly expanding mode of doing business.

Limitations and Asymmetries of Infrastructure


1.

The infrastructure of the Internet, which acts as the current global


information infrastructure, has acknowledged problems.

2.

The issues turn on the provision of sufficient band width for the
surging use that is also moving to multimedia transmissions, and on
the problems fostered by the decentralized nature of the Internet.

Risks in ECommerce

Business practices

Information protection

Transaction Integrity

Privacy and Trust

Global Efforts Towards Retaining Privacy & Building Trust

Web Trust

TRUSTe

P3P (Privacy Preferences Project)

E-commerce
Statistics
Business to Commerce
(B2C) Commerce Statistic
U.S. Business-to-Consumer (B2C) E-Commerce Forecast
(All in USD Millions)
1999
2000
2001
2002
2003
2004
2005
$28,550 $44,120 $61,820 $91,878 $125,265 $168,815 $227,690
Source:GartnerG2 (December 2001)

B2C
B2C Commerce
$28,550
$44,120
$227,690

$61,820

1999
2000
2001

$91,878

2002
2003
2004
2005

$168,815

$125,265

E-commerce
Statistics
Costs of Traditional vs. Online Purchasing Processes-USD
Source: American Express/Ernst & Young, June 2002
Process Step
Traditional Process Purchase Card + eCommerce
Buying
59.00
3.40
Paying
12.00
0.34
Reconciling integration
19.00
0.70
Avg transaction cost
90.00
4.44

Tradnl vs. Online


Graphs
T ra n sa ctio n C o st in $

Cost of Traditional vs. Online Purchasing


Processes

90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00

90.00
59.00

19.00
12.00
3.40

Buying

Traditional Process
Purchase Card + eCommerce

0.34

0.70

Reconciling
integration

Process Step

4.44

E-commerce
Statistics

Total Worldwide E-Commerce Revenues, 2004 (B2B & B2C)


Source: Forrester Research
Region Norht America Asia Pacific Western Europe Latin America Rest of World
Total
$3.50
$1.60
$1.50
$81.80
$68.60
Tril ion
Tril ion Tril ion
Bil ion
Bil ion

Worldwide Ecommerce Revenues


Total Worldwide E-Commerce Revenues

$3.50

$1.60
$1.50

$68.60
$81.80

Norht America

Asia Pacific

Western Europe

Latin America

Rest of World

E-commerce
Statistics

Transaction Size At Commerce-Enabled Web Sites

Source: ActivMedia Research


Size $1-50 $51-100 $101-500 $501-1,000 $1000-10,000 Up-$10,000 Average
Sample 20% 13%
27% 9%
23%
8% $4,622
B2C
22% 15%
26% 10%
20%
8% $4,450
B2B
5%
5%
36% 5%
41%
8% $5,580

Median
$300
$244
$800

Commerce Enabled
Web Sites
Transaction Size @ Commerce Enabled WebSites

600000%

Percentage

500000%
400000%
300000%

Sample
B2C

200000%

B2B

100000%
0%
$1-50

$101500

$100010,000
Size

Average

Preferences

Business and Technology: Electronic Commerce:


centre.org.uk/products_buinesstech_ecommerce.htm)

Western Australia E-Commerce Centre:


(http://www.ecommercecentre.online.wa.gov.au/government/egovwhat.htm)

E-commerce Security: (http://www.ftc.gov/bcp/menu-internet.htm)

Business to Business Marketplace:


(http://www.traderinasia.com/b2bverticalmarketplace.html)

(http://www.e-