CP3401/5636

Introduction to E-commerce

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Readings / Preparation

Pre-lecture Preparation:

• Puma Goes Omni (Laudon p43-46)

• Will Apps Make the Web Irrelevant? (Laudon
p64-65)’

Readings:
• Laudon Ch1 & Ch 2

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Learning outcomes
By the end of this topic, you should be able to

• Define e-commerce and describe how it differs from e-business

• Identify and describe the unique features of e-commerce
technology and discuss their business significance
• Describe the major types of e-commerce
• Describe how Internet and Web features and services support
e-commerce.
• Recognize and describe Web 2.0 applications
• Identify the factors that will define the future of e-commerce

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Case Discussion 1
Puma Loves Social, Local, Mobile, Omni

• How effective do you think Puma’s Web site is as a

retail e-commerce site?

• How does Puma use social media to support its

business?

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What is E-commerce & what is
E-business
• E-Commerce:

• Use of Internet and Web to transact business

• Digitally enabled commercial transactions between

and among organizations and individuals

• E-business:
• the digital enabling of transactions and processes within a
firm, involving information systems under the control of the
firm

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What is E-commerce & what is
E-business

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Why Study E-commerce?

• E-commerce brings fundamental changes to

commerce
• Traditional commerce:
• Consumer as passive targets
• Mass-marketing driven
• Sales-force driven
• Fixed prices
• Information asymmetry: any disparity in relevant market
information among parties in a transaction

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8 Unique Features of E-
commerce Technology

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8 Unique Features of E-
commerce Technology

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Omni-channel

• Omni-channel is the evolution of multi-channel

or cross-channel retailing to encompass all
digital and social technologies.

• The idea is that customers can examine, access,

purchase, and return goods from any channel,
and even change channels during the process,
and at each step along the way and in each
channel, receive timely and relevant product
information.
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This is just the beginning

• First 20 years of e-commerce

• Just the beginning
• Market crash of 2000-2001
• Rapid growth and change

• Technologies continue to evolve at exponential rates

• Disruptive business change
• New opportunities

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This is just the beginning

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E-commerce Trends 2014–2015
(Business)

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E-commerce Trends 2014–2015
(Technology)

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E-commerce Trends 2014–2015
(Society)

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Types of E-commerce

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The Internet: Technology
Background
• Internet
• Interconnected network of thousands of networks and
millions of computers
• Links businesses, educational institutions, government
agencies, and individuals

• World Wide Web (Web)

• One of the Internet’s most popular services
• Provides access to billions, possibly trillions, of Web
pages

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Domain Names, DNS, and URLs

• Domain name
• IP address expressed in natural language, e.g.
www.jcu.edu.au
• Domain name system (DNS)
• Allows numeric IP addresses to be expressed in natural
language
• Uniform resource locator (URL)
• Address used by Web browser to identify location of content
on the Web
• For example: https://www.jcu.edu.au/students

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Client/Server Computing

• Powerful personal computers (clients) connected in

network with one or more servers
• Servers perform common functions for the clients
• Storing files
• Software applications
• Access to printers, and so on

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The New Client:
The Mobile Platform
• Primary Internet access is now through:
• Tablets
• Supplementing PCs for mobile situations
• Smartphones
• Disruptive technology:
• Shift in processors, operating systems
• 38% of all cell phones

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Cloud Computing

• Firms and individuals

obtain computing power
and software over Internet
• Public, private, and hybrid
clouds
• Radically reduces costs of:
• Building and operating Web
sites
• Infrastructure, IT support
• Hardware, software
• Risks: Organizations
become dependent on
outside providers
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Wi-Fi Networks

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Internet Drone by Facebook
Aquila

This enormous unmanned aerial

vehicle is called Aquila.

The idea is that Aquila will circle in

the stratosphere, above the weather,
wirelessly beaming Internet signals to
base stations in underdeveloped
areas of countries like Nigeria and
Source:
http://mashable.com/2015/07/30/facebook- India.
internet-org-one-year/#pNkq_51uDPq1
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The Web: Features

• Features on which the foundations of

e-commerce are built:
• E-mail
• Instant messaging
• Search engines
• Online forums
• Streaming media
• Cookies

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Web 2.0

• Web2.0:a set of applications and technologies that

allows users to create, edit, and distribute content;
share preferences, bookmarks, and online personas;
participate in virtual lives; and build online
communities.

• User-generated content and communication

• Highly interactive, social communities
• Large audiences; yet mostly unproven business models
• Examples: Twitter, YouTube, Instagram, Wikipedia, Tumblr,
Uber

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Web 2.0 Features and Services

• Online Social Networks

• Services that support communication among networks of
friends, peers
• Blogs
• Personal Web page of chronological entries
• Really Simple Syndication (RSS)
• Program that allows users to have digital content
automatically sent to their computers over the Internet

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Web 2.0 Features and Services

• Podcasting
• Audio presentation stored as an audio file and available for
download from Web
• Wikis
• Allows user to easily add and edit content on Web page
• Music and video services
• Online video viewing
• Digital video on demand

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Web 2.0 Features and Services

• Internet telephony (VoIP)

• Voice over Internet Protocol (VoIP) uses Internet to transmit
voice communication
• Video conferencing, video chatting, and telepresence
• Online software and Web services
• Web apps, widgets, and gadgets

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Intelligent Personal Assistants

• Software that interacts with the user through voice

commands
• Features
• Natural language; conversational interface
• Situational awareness
• Interpret voice commands to interact with various Web
services
• Examples: Siri, Google Now

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Mobile Apps

• Use of mobile apps has exploded

• Almost 75% of online shoppers are mobile shoppers as
well
• Increased use/purchasing from tablets
• Platforms
• iPhone/iPad (iOS), Android, Blackberry
• App marketplaces
• Google Play, Apple’s App Store, RIM’s App World,
Windows Phone Marketplace

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The Internet and the Evolution
of Corporate
Computing
Figure 1.11, Page 41

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Case Discussion 2
Will Apps Make the Web Irrelevant?

• What are the advantages and disadvantages of apps,

compared with Web sites, for mobile users?
• What are the benefits of apps for content owners and
creators?
• Will apps eventually make the Web irrelevant?
• Why or why not?

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How E-commerce Changes
Business

Porter 5 forces:
https://hbr.org/vid
eo/359061522600
1/the-explainer-
porters-five-forces

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Technologies Reshaping Enterprise

• Disintermediation: displacement of market middlemen

who tradition- ally are intermediaries between
producers and consumers by a new direct relationship
between producers and consumers

• Friction-free commerce a vision of commerce in which

information is equally distributed, trans- action costs
are low, prices can be dynamically adjusted to reflect
actual demand, intermediaries decline, and unfair
compet- itive advantages are eliminated
•

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Technologies Reshaping Enterprise

• First movers—those firms who were first to market in a

particular area and who moved quickly to gather
market share.
• In a “winner take all” market, first movers could establish a
large customer base quickly, build brand name recognition
early, create an entirely new distribution channel, and then
inhibit competitors (new entrants) by building in switching
costs for their customers through proprietary interface
designs and features available only at one site.

• Is it good or bad to be first mover ?

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Technologies Reshaping Enterprise

• A network effect occurs where all participants receive

value from the fact that everyone else uses the same
tool or product
• for example, a common operating system, telephone
system, or software application such as a proprietary instant
messaging standard or an operating system such as
Windows)
• all participants increase in value as more people adopt them

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The Future Internet

• Latency solutions
• diffserv (differentiated quality of service)

• Guaranteed service levels and lower error rates

• Ability to purchase the right to move data through network at
guaranteed speed in return for higher fee

• Declining costs
• The Internet of Things (IoT)
• Objects connected via sensors/RFID to the Internet
• “Smart things”
• Interoperability, standards, and privacy concerns

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IoT Examples

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IoT Examples

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Summary:
We have discussed,

• difference of e-commerce and e-business

• the unique features of e-commerce technology and discuss
their business significance
• Web 2.0 applications
• the major types of e-commerce
• the evolution of e-commerce from its early years to today
• the factors that will define the future of e-commerce
• the major themes underlying the study of e-commerce

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Quiz Question 1

E-commerce can be defined as:

A) the use of the Internet, the Web, and mobile apps to transact
business.
B) the use of any Internet technologies in a firm's daily activities.
C) the digital enablement of transactions and processes within an
organization.
D) any digitally enabled transactions among individuals and
organizations.

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Quiz Question 2

• True or False

• The online marketplace is characterized by persistent price

dispersion.

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Quiz Question 3

Which of the following is not a unique feature of e-commerce

technology?
A) interactivity
B) social technology
C) information asymmetry
D) richness

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Quiz Question 4

True/ False

Amazon Web Services is an example of cloud computing.

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Quiz Question 5

________ is a model of computing in which firms and individuals

obtain computing power and software applications over the
Internet, rather than purchasing and installing it on their own
computers.

A) Client/server computing
B) P2P computing
C) Mobile computing
D) Cloud computing

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