Chapter 1

Introduction
E-commerce, E-business, Features of E-commerce, Pure vs. Partial E-
commerce, History of E-commerce, E-commerce Framework (People,
Public Policy, Marketing and Advertisement, Support Services, Business
Partnerships), Types of E-commerce: B2C, B2B, C2B, C2C, M-Commerce,
U-commerce, Social-Ecommerce, Local E-commerce, Challenges in E-
commerce, Status of E-commerce in Nepal, Overview of Electronic
Transaction act
 What is commerce?
• Commerce is a division of trade or production which deals with the exchange
of goods and services from producer to final consumer. It comprises the
treading of something of economic values as goods, services, information or
money between two or more entities. Commerce primarily express the fairly
abstract notations of buying and selling.
What is E-commerce?
• E-commerce is the process of selling goods and services over the
internet. Customers come to the website or online marketplace and
purchase products using electronic payments. Upon receiving the
money, the merchant ships the goods or provides the service.
Electronic commerce has been around since the early 1990s when
Amazon just sold books, but today, it’s a multibillion-dollar industry –
and it has gotten even bigger during the pandemic. According to
Digital Commerce 360’s analysis of U.S. Department of Commerce
data, e-commerce spending hit $347.26 billion in the first half of
2020, up 30% year over year. For comparison, e-commerce sales only
increased 12.7% during the first six months of 2019.
E-commerce definition on different
perspective
• Communication perspective: EC is the delivery of information,
products/services, or payments over the telephone lines, computer
networks or any other electronic means.
• Business process perspective: EC is the application of technology
towards the information of business transactions and work flow.
• Service perspective: EC is a tool that addresses the desire of firms,
consumers and management to cut service costs while improving the
quality of goods and increasing the speed of service delivery.
• Online perspective: EC provides the capability of buying and selling
products and information on the internet and other online services.
What is e-business?
E-business is short for “electronic business.” As an overarching term, it refers
to any method of utilizing digital information and communication
technologies to support or streamline business processes – from preparation
to implementation. However, it can also refer more specifically to the business
processes of online stores or other internet-based companies.
These two slightly different interpretations of the term have led to a problem:
a widely accepted, precise definition of e-business does not yet exist. As a
result, it’s interpreted broadly, and is commonly misunderstood – mainly in
relation to e-commerce. Although there is some overlap, e-commerce refers
to trading products and services online, and so is strictly only speaking of one
aspect of e-business.
E-business is a general term that encompasses all forms of using digital
information and communication technologies to support and optimize
business processes. In contrast, e-commerce describes only the online trading
of products and services, and is therefore only a subsection of e-business
Features of E-commerce
Features of E-commerce
1) Ubiquity : E-commerce is widespread, that is, it is available everywhere always. It
sets free market from being restricted to a physical space and makes it possible to
shop from computer (such as desktop, laptop). The result is called a market space.
For consumers, ubiquity cuts transaction costs for exploring products in a market.
Consumers can acquire any information whenever and wherever they want,
regardless of their location. It is no longer necessary that buyer spend time and
money for traveling to a market. In all, it saves the cognitive energy needed to
transect in a market space.
2) Global Reach : E-commerce technologies enable a business to easily reach across
geographic boundaries around the earth far more conveniently and effectively as
compared to traditional commerce. Globally, companies are acquiring greater
profits and business results by expanding their business with e-commerce solutions.
As a result, the potential market size for e-commerce merchants is approximately
equal to size of online population.
3) Universal Standards : Universal Standards are standards shared by all the nations
around world. These are technical standards of Internet for conducting e-commerce.
It gives all the ability to connect at the same "level" and it provides network
externalities that will benefit everyone. Universal technical standards lower entry
costs and minimal search costs.
Features of E-commerce
4) Interactivity : E-commerce technologies permits two-way communication between
customer and sellers which makes it interactive. It proves as significant feature of e-
commerce technology over the commercial traditional technologies of the 20th century.
5) Information Density : Information density means total amount and quality of information
available over Internet to all market buyers and sellers. Internet vastly increases information
density. Information density offers better quality information to consumer and merchants. E-
commerce technologies increase accuracy and timeliness of information. For example,
flipkart.com store has variety of products with prices.
6) Richness : Richness refers to the complexity and content of a message. Richness means all
commercial activity and experience, conducted through a variety of messages. For example,
text, pictures, videos, sound, links, SMS (Short Message Services) etc.
7) Personalization : E-commerce technology offers personalization. Personalization means
designing marketing messages according to particular individuals by customizing it as per
customer personal details like name, interests, and past purchases record. Products or
services can be modified or altered according to the user's choice or past buying record.
Pure vs partial e-commerce
We can categories pure or partial EC depending upon the nature of it’s
activities.
1. Order and payment
2. Order fulfillment
3. Delivery to customer
Each activity can be done physically or digitally. Thus, there are mainly 8
possible combination. If all activities are digital, we have pure EC if
none digital, we have no EC otherwise we have partial EC.
E-commerce Framework (People, Public Policy,
Marketing and Advertisement, Support Services,
Business Partnerships),
Types of E-commerce
M-Commerce
• M-commerce (mobile commerce) is the buying and selling of goods
and services through wireless handheld devices such as smartphones
and tablets. M-commerce is a form of e-commerce that enables users
to access online shopping platforms without the use of a desktop
computer.
• Over time, content delivery through wireless devices has become
faster, more secure and scalable. As a result, mobile commerce has
grown rapidly.
• Examples of m-commerce include in-app purchasing; mobile banking
virtual marketplace apps, such as the Amazon mobile app; and digital
wallets, such as Apple Pay, Google Pay and Samsung Wallet.
U-commerce
• U-commerce is referred as Ubiquitous Commerce and widely used by
eCommerce service provider companies to deploy and publish eCommerce
portals and websites for varied requirements. The development of U-
Commerce is based on information and Technologies and is device as well as
place independent. The use of ubiquitous network supports uninterrupted
communications and transaction at any level.
• U-commerce is described as evolution of E-commerce as well as M-
commerce also with V-commerce and television-commerce as it involves the
use of ubiquitous networks for communication support. It is said that it is
combination of electronic, wireless/mobile, television, voice, and silent
commerce. U-commerce is used with Umbraco or Site Core.
Social-Ecommerce
• Social commerce is the process of selling your products using your
social media profiles. You can use platforms like Instagram, Facebook,
Pinterest, and TikTok to do so—each of them offers a unique set of
features to put your products in front of potential customers during
their social media scroll.
Local E-commerce
• Local ecommerce is a business practice where you sell your products
and services to local customers via an online storefront. Unlike social
commerce, where you rely on social media to connect with the
audience, local ecommerce depends on local stores and inventory to
quickly deliver products or services.
Status of E-commerce in Nepal