E-Commerce – Digital Network & Digital Goods

Sudarshan Jawale & Pankaj

ITM – XMBA, Hyd

E & Commerce
• Commerce is defined as “The buying and selling
of products and services on a large scale
involving transportation from place to place”
• When we add “E” for “Electronic”
• It derives the definition “buying and selling of
products or services over electronic systems such
as internet and other computer networks”
• This typically means that orders and payments
pass electronically
Defining E-Commerce from
different Perspectives

• Communications
• Commercial
• Business Process
• Service
• Learning
• Community
Communications
• From a communication
perspective, e-commerce
is the delivery of goods,
services, information, or
payments over computer
networks or by any other
electronic means
Commercial (trading)
• From a commercial
perspective, e-commerce
provides the capability of
buying and selling
products, services and
information on the
Internet and via other
online services.
Business Process
• From a business process
perspective, e-commerce
is doing business
electronically by
completing business
processes over electronic
networks.
Service
• From a service perspective,
e-commerce is a tool that
addresses the desire of
governments, firms,
consumers, and mgmt to cut
service costs while improving
the quality of customer
service and increasing the
speed of service delivery.
Learning
• From a learning
perspective, e-commerce
is an enabler of online
training and education
in schools, universities,
and other organizations.
Community
• From a community
perspective, e-commerce
provides a gathering
place for community
members to learn,
transact and collaborate
Brief History of E-Commerce
• 1970s: Electronic Funds Transfer (EFT)
▫ Used by the banking industry to exchange account
information over secured networks

• Late 1970s and early 1980s: Electronic Data

Interchange (EDI) for e-commerce within
companies
▫ Used by businesses to transmit data from one business
to another

• 1990s: the World Wide Web on the Internet

provides easy-to-use technology for information
publishing and dissemination
▫ Cheaper to do business (economies of scale)
▫ Enable diverse business activities (economies of scope)
Reasons why to use E-Commerce…?
• Low Entry Cost

• Reduces Transaction Cost

• Access to the global market

• Online Distribution

• Secure Market Share

Low Entry Cost
• A company can establish
itself on the Internet, and
open for business, with a
relatively small investment.
Thousands of companies
operate simple,
inexpensive sites that are
successful in their markets
Reduces Transaction Costs
• Dealing with customers over the
Web, whether to process orders
or to attend to customer
support, is cheaper than
traditional marketing methods.
For example, Dell Computer
Corporation estimates that it
saves eight dollars each time a
customer checks the status of an
order at the Dell Web site,
instead of calling the company.
Access to the global market
• With a traditional business,
the target market may be the
local community or, with a
higher advertising budget, it
may extend to neighboring
communities. The Web
extends the reach of even the
smallest businesses by
allowing them to market
products globally.
Online distribution
• The Web enables
businesses to
distribute data and
software online
Secure market share
• Getting a business online protects its current
offline market share from being eroded by an
online entrepreneur. If a business enters the e-
commerce market too late, competitors who have
already established a Web presence may make a
successful market entry more difficult.
The Process of E-Commerce
• A consumer uses Web browser to connect to the
home page of a merchant's Web site on the Internet.
• The consumer browses the catalog of products
featured on the site and selects items to purchase.
The selected items are placed in the electronic
equivalent of a shopping cart.
• When the consumer is ready to complete the
purchase of selected items, he provides a bill-to and
ship-to address for purchase and delivery
• When the merchant's Web server receives this
information, it computes the total cost of the order--
including tax, shipping, and handling charges--and
then displays the total to the customer.
• The customer can now provide payment
information, such as a credit card number, and then
submit the order.
• When the credit card number is validated and the
order is completed at the Commerce Server site, the
merchant's site displays a receipt confirming the
customer's purchase.
• The Commerce Server site then forwards the order
to a Processing Network for payment processing and
fulfillment.
Types Of E-Commerce

• Business-to-Business (B2B):

• Business-to-Consumer (B2C):

• Business-to-Government (B2G):

• Business-to-Employee (B2E):

• Consumer-to-Consumer (C2C):
Business-to-Business (B2B):
• Business-to-Business
is a term commonly
used to describe
electronic commerce
transactions between
businesses
Business-to-Consumer (B2C):
• Business-to-Consumer
describes activities of
E-businesses serving
end consumers with
products and/or
services
Business-to-Government (B2G):
• Business to Government is a
derivative of B2B marketing
and referred to as a market
definition of "Public Sector
Marketing" which
encompasses marketing
products and services to the
Government through
Integrated Marketing
Communications techniques
Business-to-Employee (B2E):
• Business-to-employee -
electronic commerce uses

Self Service
Employee
CRM &
KM

an intrabusiness network
which allows companies
B2E
to provide products
and/or services to their
employees. Typically,

Corporate
companies use B2E
PM

Comm’s

Internal
HRM &

networks to automate
employee-related
corporate processes
Examples of B2E applications include:

• Online insurance policy management

• Corporate announcement dissemination
• Online supply requests
• Special employee offers
• Employee benefits reporting
Consumer-to-Consumer (C2C):
• It involves the electronically-
facilitated transactions
between consumers through
some third party. A common
example is the online auction,
in which a consumer posts an
item for sale and other
consumers bid to purchase it;
the third party generally
charges a flat fee or
commission. The sites are only
intermediaries, just there to
match consumers. They do not
have to check quality of the
products being offered.
PROS and CONS of E-COMMERCE:
PROS
• No checkout queues
• Reduced prices
• You can shop anywhere in the world
• Easy access 24 hours a day
• Wide selection to cater for all consumers
CONS
• Unable to examine products personally
• Not everyone is connected to the Internet
• There is the possibility of credit card number
theft
• On average only 1/9th of stock is available on the
net
Overview of
E-commerce
growth in
India
• The number of Internet users in India is growing
very fast with -
literacy rates, rapidly growing internet user base,
technical advancement & adoption
• According to the government’s eco survey there
were an estimated 81 m Internet subscribers and
about 71 m Internet users by Dec 2010
• In India, banking is helping growth of E-commerce
• Modern e-commerce banking facilities such as
online banking, mobile banking, credit card, ATM
facility and online payment of the utility bills
• The online travel industry is the biggest segments
in E-commerce & is booming due to largely
Internet-savvy urban population
e.g: Makemytrip, Cleartrip, Yatra, IRCTC, etc

• The other segments, categorized under online non-

travel industry, include e-Tailing (online retail),
online classifieds and Digital Downloads (still in a
nascent stage) e.g: Mac App store, iphone store,
Direct2Drive, Playstation store

• The online classifieds segment is broadly divided

into three sectors; Jobs, Matrimonial and Real
Estate
E-commerce beats retailers in
customers satisfaction
Operation E-Commerce:
Websites doing e-commerce
business in India
• eBay.in
• shopping.rediff.com
• indiamart.com
• futurebazaar.com
• mall.sify.com
• Gigasoft, Synapse, Planet E-Com, etc