Lecture 01 Introduction

ELECTRONIC COMMERCE
LECTURER: Olivier Kevin Angel

Email: kishimwe@uok.ac.rw
Labor for the future Lecturer: Olivier Angel Kevin 1

Course outline
 CHAP 1: Introduction to electronic commerce

 CHAP 2: Electronic security
 CHAP 3: Electronic procurement
 CHAP 4: Electronic purchasing
 CHAP 5: Electronic legal
 CHAP 6: Electronic marketing
 CHAP 7: Electronic tendering
 CHAP 8: Electronic vendor management

CHAPTER 1. INTRODUCTION TO E-COMMERCE
1.1 INTRODUCTION
Commerce
Traditional Commerce May Be Defined As: The Exchange Or Buying And
Selling Of Commodities; The Exchange Of Merchandise, On A Large Scale,
Between Different Places Or Communities; Extended Trade Or Traffic.
What is E-Commerce?
e-commerce (electronic commerce or ec) is the buying and selling of goods and
services on the internet, especially on the w.w.w.
“E-commerce Is The Exchange Of Information Across Electronic Networks, At
Any Stage In The Supply Chain, Whether Within An Organization, Between
Businesses, Between Businesses And Consumers, Or Between The Public And
Private Sector, Whether Paid Or Unpaid”, Business Report, (1999).

Code of Conduct for E-Commerce
The following guidelines, published by the Organization for Economic Cooperation and
Development there exist code of conduct for companies engaging in e-commerce.
- Use fair business, advertising, and marketing practices by avoiding misleading
practices.
- Provide accurate, clear and easily accessible information about the company and the
goods or services it offers.
- Disclose full information about the terms, conditions and costs of the transaction.
- Ensure that consumers know they are making a commitment to buy before closing the
deal.
- Provide an easy-to-use and secure method for online payments.
- Protect consumer privacy during electronic commerce transactions
- Address consumer complaints and difficulties

E-commerce activities include:
Electronic trading of goods and services,
On-line delivery of digital contents,
Electronic fund transfers,
Electronic shares trading, Electronic bills of lading,
Collaborating design and engineering,
Public procurement, Bid at on-line auctions,
Manage banking affairs on any day of the week at any time of the day or night.
Therefore, the following are the relationship between e-commerce and e-business
a) E-commerce has some degree of overlap with e-business
b) E-commerce is broadly equivalent to e-business
c) E-commerce is a subset of e-business

Types of e-commerce
-Business to Business e-commerce (B2B) example Dell Corporation with
Supplies of raw materials, or a company selling computer, printers,
photocopiers, etc… would likely be a B2B sales organization.
-Business to Consumer e-commerce (B2C) example Amazon or Dell
Corporation with buyers of computers.
-Business to Government e-commerce (B2G) example e-procurement.
-Consumer to Consumer e-commerce (C2C) common example is the online
auction, in which a consumer posts an item for sale and other consumers bid to
purchase it. Example people selling their used assets like digital cameras, etc
……
-Consumer to Business e-commerce (C2B) It is about how consumers do
business with organizations. consider consumers selling back their used items to
business as an example.

Why go online?
-Companies can make their existing business more efficient by using e-business
techniques to reduce costs and save money.
-But developing an e-business strategy requires realistic goals and careful
planning.
-In the virtual world of the Internet many of the obstacles of the physical world
are removed. The Internet is open for business 24 hours 7 days a week
(globally).
Why e-commerce?

STATUS OF E-COMMERCE IN EAC
-I can say non-existent in most parts of EAC, apart from few companies
having web sites and advertising their products, but once it comes to means of
payment, they use a different channel of offline payment.
-The starting is not bad, till the writing of this paper, several banks have
introduced Automated Teller Machines (ATMs), and debit cards to allow
consumers to buy, and pay their bills electronically. With ATMs people don’t
need to walk with a big sum of money.
-There is no single Bank in EAC which offers the credit card to its clients.

Problems to E-commerce in EAC
1. Inadequacy Of Infrastructure For The Electronic Communications.
2. Internet And Telephone Charges Are Expensive, Few Can Afford.
3. Banks Are Still Backward, Used To Traditional Way Of Operating;

Solution to some mentioned problems:
1. EAC is teaming up together to set up a marine cable, The cable will start from
Mtunzini located north of Durban in South Africa to Port Sudan in Sudan a
distance of 9,900Km. The project is driven by 15 telecommunications entities
from 13 countries of Eastern Africa region.
2. KARISIMBI project in Rwanda will also accelerate e-commerce in Rwanda

and EAC as well.
3. Efficient licensing of telecoms operators:
4. Commitment to reducing tariff barriers for IT equipment:
5. ICT Policy, it will be easy for e-commerce to have roots in EAC

Model of payment in e-commerce
When you purchase goods and services online, you pay for them using an
electronic medium. This mode of payment, without using cash or cheque, is
called an e-commerce payment system and is also known as online or
electronic payment systems.
The growing use of internet-based banking and shopping has seen the
growth of various e-commerce payment systems and technology has been
developed to increase, improve and provide secure e-payment transactions.

Paperless e-commerce payments have revolutionized the
payment processing by reducing paper work, transaction
costs, and personnel cost. The systems are user-friendly
and consume less time than manual processing and help
businesses extend their market reach.

Different types of
e-commerce payments used
today

Difference between Credit card, Debit Card and Smart Card
Credit Card Debit Card Smart Card
1. A Credit card is basically an

1. Debit cards are magnetic strip 1. A smart card contains a special
electronic card with magnetic data
and chip enabled cards, issued to embedded microprocessor, which
strip or a chip, issued to customers
customers by their respective is a computer processor or a
by banks and other credit
banks. microchip.
agencies.
2. credit cards are lines of credit 2. Any time you use a debit card
when you use a credit card, the to buy something, money is 2. Smart cards applications benefit
issuer puts money toward the deducted from your account with consumers where their life and
transaction.This is a loan you are a debit card you can really only business habits intersect with
expected to pay back in full unless spend the money you have payment processing technologies.
you won't to be charged interest. available to you.

3. A PIN makes them secure so 3. Smart cards offer more security
3. Credit cards in the U.S are not
long as no one steals the card and confidentially than any other
very secure and of themselves
number and PIN as long as you financial or transaction storage card
many still deted card technology.
don't lose the card itself. If the card the market. They are a safe place
However consumers are not held
is stolen, debit cards are very to store sensitive or personal
liable for this poor security.
insecure . information .
4.Credit Card Not required to be 4. Smart cards links directly to the

4. Checking or saving accounts .
connected to a checking account. Internet .
5. Debit cards can be used with a

5. Credit cards are mostly used in
PIN almost everywhere retail 5. Smart cards widely used in
online payments, to sell things or
stores, gasoline, restaurants and pay telecommunications industry.
the web.
phones.

6. Debit cards are more readily
6. For the merchant credit card accepted by merchants than 6. The retail industry widely
transactions result in are checks. especially in uses applications of the smart
immediate credit to the countries where check cashing card more specially to identify
merchants bank account. and check processing are not and reward customers.
widely used.

E-Wallet
E-Wallet is a prepaid account that allows the customer to store

multiple credit cards, debit card and bank account numbers in a
secure environment. This eliminates the need to key in account
information every time while making payments. Once the
customer has registered and created E-Wallet profile, he/she can
make payments faster.

Mobile Payment
One of the latest ways of making online payments are through mobile phones. Instead of using a credit
card or cash, all the customer has to do is send a payment request to his/her service provider via text
message; the customer’s mobile account or credit card is charged for the purchase. To set up the mobile
payment system, the customer just has to download a software from his/her service provider’s website and
then link the credit card or mobile billing information to the software.
Amazon Pay
Another convenient, secure and quick way to pay for online purchases is through Amazon
Pay. Use your information which is already stored in your Amazon account credentials to
log in and pay at leading merchant websites and apps. Your payment information is safely
stored with Amazon and accessible on thousands of websites and apps where you love to
shop.
Bank payments
This is a system that does not involve any sort of physical card.
It is used by customers who have accounts enabled with Internet
banking. Instead of entering card details on the purchaser's site,
in this system the payment gateway allows one to specify which
bank they wish to pay from.
Then the user is redirected to the bank's website, where one can
authenticate oneself and then approve the payment. Typically
there will also be some form of two-factor authentication.

If you are planning to sell your products online, Amazon or other
website would be happy to help you in setting up payment gateways for
your products and services. You can also consider selling on Amazon,
one of the most popular e-commerce platforms in the world. To sell on
Amazon, please register yourself for free.
Labor for the future Lecturer: Olivier Angel

Kevin 20
Advantages of embracing e-commerce:
1. The constraints of time and distance are no longer barriers to businesses;
consumers can buy any time and anywhere.
2. Globalization of e-commerce is bringing people, products, information,

and capital together faster than traditional methods of the past.
3. As the reach of Internet is vast, sellers can sell goods to a larger number of
people. Moreover, a seller can reach a customer who is physically too far
away. The customer, on the other hand, can buy something from a merchant
who would otherwise not have been accessible to him.

 4. the international marketplace:
because e-commerce is a truly global business, african
entrepreneurs can focus on specific overseas niche markets in
which they have a competitive edge and which embody a much
better combination of internet connectivity, purchasing power,
willingness and ability to make internet-based purchase than is
typically the case in eac.
 5. Increase sales, generate hard currency, and boost employment
and welfare:
EAC communities need to invest in e-commerce to be able to tap
these opportunities otherwise we will be left behind.

6.Lead to better business practices, enhance transparency & efficiency:
Competition is enhanced because the marketplace is open to everybody and
suppliers are everywhere, a customer is not limited by geographical location.
7. Reduced business transactions costs:

You save travelling cost, food and accommodation in a foreign country, with
e-commerce you can do every thing online in you own country while at the
same time you are engaged in your business. Sellers and buyers interact
easily using the Internet.
8. E-payments help drive economic growth:

E-payments play a significant and sizeable role in promoting economic
growth and development.

E-COMMERCE BENEFITS, LIMITATIONS AND
APPLICATIONS
E-COMMERCE BENEFITS
The benefits of e-commerce can be seen to affect three major stakeholders:
organizations, consumers and society.
Benefits of e-commerce to organizations

1. International marketplace.
What used to be a single physical marketplace located in a geographical
area has now become a borderless marketplace including national and
international markets. By becoming e-commerce enabled, businesses now
have access to people all around the world.

2. Operational cost savings.
The cost of creating, processing, distributing, storing and
retrieving paper-based information has decreased.
3. Lower telecommunications cost.
The Internet is much cheaper than value added networks (VANs)
which were based on leasing telephone lines for the sole use of the
organization and its authorized partners. It is also cheaper to send
a fax or e-mail via the Internet than direct dialing.

4. Digitization of products and processes.
Particularly in the case of software and music/video products,
which can be downloaded or e-mailed directly to customers via
the Internet in digital or electronic format.
5. No more 24-hour-time constraints.

Businesses can be contacted by or contact customers or suppliers
at any time.

Benefits of e-commerce to consumers
1. 24/7 access.
Enables customers to shop or conduct other transactions 24
hours a day, all year round from almost any location.
For example, checking balances, making payments,
obtaining travel and other information.
2. More choices.
Customers not only have a whole range of products that they
can choose from and customs, but also an international
selection of suppliers.

3. Price comparisons.
Customers can ‘shop’ around the world and conduct comparisons
either directly by visiting different sites, or by visiting a single site
where prices are aggregated from a number of providers and
compared.
4. Improved delivery processes.

This can range from the immediate delivery of digitized or
electronic goods such as software or audio-visual files by
downloading via the Internet, to the on-line tracking of the
progress of packages being delivered by mail or courier.
5. An environment of competition

Benefits of e-commerce to society
1. Enables more flexible working practices
which enhances the quality of life for a whole host of people in
society, enabling them to work from home.
2. Connects people.
Enables people in developing countries and rural areas to enjoy
and access products, services, information and other people which
otherwise would not be so easily available to them.
3. Facilitates delivery of public services.
For example, health services available over the Internet (on-line
consultation with doctors or nurses), filing taxes over the Internet.

4.2 THE LIMITATIONS OF E-COMMERCE
These again will be dealt with according to the three major
stakeholders:
organizations, consumers and society
Limitations of e-commerce to organizations

1. Lack of sufficient system security, reliability, and standards
There are numerous reports of websites and databases being
hacked into, and security holes in software.
For example, Microsoft has over the years issued many
security notices and ‘patches’ for their software.

2. Rapidly evolving and changing technology
so there is always a feeling of trying to ‘catch up’ and not
be left behind.
3. Increased competition
Facing increased competition from both national and
international competitors often leads to price wars and
subsequent unsustainable losses for the organization.

Limitations of e-commerce to consumers
1. Computing equipment is needed for individuals to participate in
the new digital economy.
2. A basic technical knowledge is required of both computing
equipment and navigation of the Internet and the World Wide Web.
3. Cost of access to the Internet, whether dial-up or broadband
tariffs.
4. Lack of security and privacy of personal data.
5. Physical contact and relationships are replaced by electronic
processes.
6. A lack of trust because they are interacting with faceless
computers.

Limitations of e-commerce to society
1. Breakdown in human interaction.

As people become more used to interacting electronically there could
be an erosion of personal and social skills which might eventually be
detrimental to the world we live in where people are more
comfortable interacting with a screen than face to face.
2. Social division.
There is a potential danger that there will be an increase in the social
divide between technical haves and have-nots – so people who do not
have technical skills become unable to secure better-paid jobs and
could form an underclass with potentially dangerous implications for
social stability.

3. Reliance on telecommunications infrastructure, power and
IT skills
Which in developing countries nullifies the benefits when

power, advanced telecommunications infrastructures and IT
skills are unavailable or scarce or underdeveloped.
4. Wasted resources.
As new technology dates quickly how do you dispose of all
the old computers, keyboards, monitors, speakers and other
hardware or software?

Things to Consider When Starting an Ecommerce
Business
While there is no doubt that e Commerce represents a
true growth industry, there remains a surprising
unwillingness among small business owners to embrace
this.
This causes businesses to miss out on numerous
opportunities, so it is imperative that you take steps now
to launch a viable e Commerce model that can leverage
the growing trend for online shopping.

Kevin 35
Here are five steps to help you achieve this:
1. Creating a Clear Understanding of Your Needs
If you were opening a physical store, your first task would be
to determine the size and the scale of the outlet in line with its
projected turnover.
The same principle should be applied to an e-Commerce
store, and this is just one of the factors that you need to clearly
define from the outset.
From this simple and strategic starting point, you can begin to
build a clear understanding of your budget and where it will
be invested within the boundaries of the project.
Kevin 36
2. Securing Your Domain Name Early
Just how early you need to secure your business and domain
name depends on the exact nature of your venture, and the
level of competition that exists within its affiliated
marketplace.
Make no mistake; however, businesses operating in
competitive markets need to take this step as an urgent course
of action. This not only secures you a domain name that can
help sustain a strong market share, but it also ensures that you
avoid being forced to adopt a moniker or web address that is
similar to a competitor.


Kevin 37
3. Selecting a Viable Platform
With your budget, domain name and precise requirements in

mind, the next step is to choose a hosting platform. This is
easier said than done, as there are a number of options available
that can help you to find, scale and develop your venture.
4. Making Marketing a Proactive Priority
Your first step should be to establish relevant social media
profiles for your brand, combining staple sites such as Facebook
and Twitter with more specific channels that relate to your
primary product or service. Then, begin to create content for
your company blog, taking the time to schedule this and kick-
start the process of engaging your audience.

Kevin 38
5. Making Sure Your Site is Mobile-friendly
According to recent statistics, mobile commerce is set to
be worth a quite staggering $626 billion by the end of
2018. Not only this, but Google even released its own
mobile-friendly algorithm last year, highlighting a clear
trend that supports the growing practice of sourcing,
referencing and buying products online.

Kevin 39
4.3 E-COMMERCE APPLICATIONS
the HTTP protocol is used for the World Wide Web (WWW) interaction
between the web browser and the Web servers/search engines.
1. The web browser sends an HTTP request for a web page to the Web Server
Labor for the future Lecturer: Olivier Angel Kevin

40
Web browsers:
as Internet explorer, Mozilla firefox, google chrome,
maxthon cloud, net scape, opera, etc.
Provide the user interface for accessing Web sites on the
Internet, intranet, and extranet sites
Perform multiple functions: sending and receiving e-mail,
downloading files, participating in discussion groups,
developing web pages.

2. The Web server locates the file requested by the user on its disk
with the help of the operating system, and having found it, sends it
back to the browser in the form of an HTTP response.
The WWW would simply go on providing different HTML

documents to a web browser.
Once this connection is established, one HTTP request goes from the
client to the server using this TCP connection.

3.Search Engine
The software used on a server or a collection of

servers dedicated to indexing Internet web pages,
storing the results and returning lists of pages
which match particular queries.
Some of the most popular search engines are: MSN,

Google, Yahoo!, and Ask.com,

Assist end users finding almost all types of information they
need on the Internet.
Each search engine has its own method of searching.
These search engines are information refineries, helping us

quickly distill useful material from the mountains of data
that comprises the Internet.

4. Database applications
Traditional Database applications and Advanced Database
applications
Traditional Database applications

In the traditional database applications, most of the
information stored and accessed is either textual or numeric.
Some traditional database applications are:
Banking, Inventory, Airline reservation, Library
management , Hospital management, etc…

Advanced Database applications
Some of the advanced applications of database systems are:
- Multimedia databases-that can store pictures, video clips
and sound messages.
- Geographic information systems (GIS)-that can store and
analyze maps, weather data and satellite images
- Data warehouses and Online analytical processing
(OLAP)-that are used in many companies to extract and
analyze useful information from very large databases for
decision-making.

- Real-time and Active database technology: that is used in
controlling industrial and manufacturing processes
- Mobile Databases: they are available on the users portable
computers. Users interact with the mobile database
application, which in turn accesses the data stored in the
mobile databases through the DBMS.
- Web databases: are integrated with web to support
business operations like e-commerce, supply chain
management or web publishing.

Examples of applicable E-commerce apps
- EPOS: Electronic Point of Sales
- Client web services API (the system/apps can be customized to
meet customer’s website requirements).
- Shopping cart is Search Engine Friendly & Google Compliant.
- Metatags can be inserted into each products pages for optimal
exposure across the Internet.
- GIS focal point topologies

Lecture 01 Introduction

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lecture 01 Introduction

Uploaded by

Copyright:

Available Formats

ELECTRONIC COMMERCE

LECTURER: Olivier Kevin Angel

Labor for the future Lecturer: Olivier Angel Kevin 1

 CHAP 1: Introduction to electronic commerce

Labor for the future Lecturer: Olivier Angel Kevin 2

Labor for the future Lecturer: Olivier Angel Kevin 3

Labor for the future Lecturer: Olivier Angel Kevin 4

Labor for the future Lecturer: Olivier Angel Kevin 5

Labor for the future Lecturer: Olivier Angel Kevin 6

Labor for the future Lecturer: Olivier Angel Kevin 7

Labor for the future Lecturer: Olivier Angel Kevin 8

Labor for the future Lecturer: Olivier Angel Kevin 9

2. KARISIMBI project in Rwanda will also accelerate e-commerce in Rwanda

Labor for the future Lecturer: Olivier Angel Kevin 10

Labor for the future Lecturer: Olivier Angel Kevin 11

Labor for the future Lecturer: Olivier Angel Kevin 12

Labor for the future Lecturer: Olivier Angel Kevin 13

Credit Card Debit Card Smart Card

1. A Credit card is basically an

Labor for the future Lecturer: Olivier Angel Kevin 14

4.Credit Card Not required to be 4. Smart cards links directly to the

5. Debit cards can be used with a

Labor for the future Lecturer: Olivier Angel Kevin 15

Labor for the future Lecturer: Olivier Angel Kevin 16

E-Wallet is a prepaid account that allows the customer to store

Labor for the future Lecturer: Olivier Angel Kevin 17

Labor for the future Lecturer: Olivier Angel Kevin 19

Labor for the future Lecturer: Olivier Angel

2. Globalization of e-commerce is bringing people, products, information,

Labor for the future Lecturer: Olivier Angel Kevin 21

Labor for the future Lecturer: Olivier Angel Kevin 22

7. Reduced business transactions costs:

8. E-payments help drive economic growth:

Labor for the future Lecturer: Olivier Angel Kevin 23

Benefits of e-commerce to organizations

Labor for the future Lecturer: Olivier Angel Kevin 24

Labor for the future Lecturer: Olivier Angel Kevin 25

5. No more 24-hour-time constraints.

Labor for the future Lecturer: Olivier Angel Kevin 26

Labor for the future Lecturer: Olivier Angel Kevin 27

4. Improved delivery processes.

Labor for the future Lecturer: Olivier Angel Kevin 28

Labor for the future Lecturer: Olivier Angel Kevin 29

Limitations of e-commerce to organizations

Labor for the future Lecturer: Olivier Angel Kevin 30

Labor for the future Lecturer: Olivier Angel Kevin 31

Labor for the future Lecturer: Olivier Angel Kevin 32

1. Breakdown in human interaction.

Labor for the future Lecturer: Olivier Angel Kevin 33

Which in developing countries nullifies the benefits when

Labor for the future Lecturer: Olivier Angel Kevin 34

Labor for the future Lecturer: Olivier Angel

Labor for the future Lecturer: Olivier Angel

With your budget, domain name and precise requirements in

Labor for the future Lecturer: Olivier Angel

Labor for the future Lecturer: Olivier Angel

Labor for the future Lecturer: Olivier Angel Kevin

Labor for the future Lecturer: Olivier Angel Kevin 41

The WWW would simply go on providing different HTML

Labor for the future Lecturer: Olivier Angel Kevin 42

The software used on a server or a collection of

Some of the most popular search engines are: MSN,

Labor for the future Lecturer: Olivier Angel Kevin 43

These search engines are information refineries, helping us