ELECTRONIC DATA

COMMERCE
DEFINITION OF E-COMMERCE

- A commercial transaction which happened over the internet

- Transmitting of funds and data over an electronic network
- Powered by the internet where customers can access an online
store to browse through and place orders for products or
services via their own devices
 HOW DOES E-COMMERCE
WORK?

E-commerce works on the same principles as a physical store.

Customers come into an e-commerce store, browse products and
make a purchase. The big difference is they don’t have to get off
their couch to do so, and the customer base is not limited to a
specific geographic area or region .
 HERE’S ONE EXAMPLE OF HOW SOPHISTICATED, FULLY COMPUTERIZED E-
COMMERCE SYSTEM MIGHT WORK. NOT ALL E-COMMERCE SYSTEMS WORK IN
EXACTLY THIS WAY:

ORDER MANAGER

WEB SERVER STOCK DATABASE

MERCHANT SYSTEM

WAREHOUSE AND DISPATCH

BANK COMPUTERS
E-COMMERCE PLATFORM AND
VENDOR

An E-commerce platform is a tool used to manage an e-

commerce business. E-commerce platforms options exists
for clients in size from small businesses to large
enterprises.

Includes online marketplaces such as Amazon and

eBay, which require signing up for user accounts.
E-COMMERCE PLATFORM AND
VENDOR
Another e-commerce platform model is SaaS, where store owners
can subscribe to “rent” space in a cloud-hosted service that does not
require in-house development or on-premises infrastructure.
Examples of e-commerce marketplaces platforms:
 Shopee
 Lazada
 Amazon
 Zalora
ADVANTAGES OF E-COMMERCE

Availability
Speed of Access
Wide Availability
Easy Accessibility
International Reach
Lower Cost
Personalization and Product Recommendation
 AVAILABILIT
Y
Aside from outage or scheduled maintenance, e-commerce
sites are available anytime, allowing visitors to browse and shop.

SPEED OF ACCESS
While crowds can slow shoppers in a physical store, e-
commerce sites run quickly, determined by computing and
bandwidth considerations on consumer devices and e-commerce
sites. An e-commerce transaction can comprise few clicks and
takes less than five minutes.
WIDE AVAILABILITY

Amazon’s first slogan was “Earth’s Biggest Bookstore”.

They could make this claim because they were an e-
commerce site and not a physical store that had to stock
each book on its shelves. E-commerce enables brands to
make a wide array of products available, they shipped
from a warehouse after a purchase is made. Customers
will likely have more success finding what they want.
 EASY
ACCESSIBILITY
Customers who are shopping at a physical store may have difficulty
locating the product. In e-commerce, visitor can browse product
category pages and use the site to find the product immediately.

INTERNATIONAL
REACH
Brick-and-mortar businesses sell to customers who physically
visit their store. With e-commerce, companies can sell to any
customer who can access the web. E-commerce has the potential
to extend a business customer base.
 LOWER COST
Pure-play e-commerce businesses avoid the cost associated
with physical stores, such as rent, inventory, and cashiers,
although they may incur shipping and warehouse cost.
PERSONALIZATION AND PRODUCT RECOMMENDATIONS
E-commerce sites can track visitors browse, search and purchase
history. They can use this data to present valuable and personalized
product recommendations and obtain valuable insights about target
markets.
Examples include the sections of Amazon product pages labeled
“Frequently bought together” and “Customers who viewed this item also
viewed.
DISADVANTAGES OF E-
COMMERCE

LIMITED CUSTOMER SERVICES

NOT BEING ABLE TO TOUCH OR SEE

WAIT TIME

SECURITY
LIMITED CUSTOMER SERVICES
If a customer has a question or issue in a physical store,
they can see a clerk, cashier, or store manager for help. In
an e-commerce store, customer service may be limited.

NOT BEING ABLE TO TOUCH OR SEE

While images on a webpage can provide a good sense of

a product, it’s different from experiencing it “directly”, such as
playing music on speakers or trying on a shirt or dress. E-
commerce can lead consumers to receive products that differ
from their expectations, which leads to returns.
 WAIT
TIME
If a customer sees an item they like in a store, they pay for
it and then go home with it. With e-commerce, there is a wait
for the product to be shipped to the customer’s address.

SECURITY

Skilled hackers can create authentic-looking websites that claim to

sell well-known products. Instead, the site sends customers to forfeit
or imitation versions of those products or collects customers credit
card information. Legitimate e-commerce sites also carry risk,
especially when customers store their credit card information with the
retailer to make future purchase easier.
REFERENCES
https://www.toppr.com
https://www.internetconsultancy.pro
EY.com
Information Technology Auditing and Assurance by James A. Hall