E-COMMERCE

Electronic-business
 e-business can be defined as
the organized effort of
individuals to produce and sell,
for a profit, the products and
services that satisfy society’s
needs through the facilities
available on the Internet.
E-commerce
 is a part of e-business and is the term
used to refer only to the buying
and selling activities online
including when a firm uses the
Internet to identify suppliers, select
products or services, make purchase
commitments, complete financial
transactions, and obtain
service.
MEANING &DEFINATION
 Refers to the use of the internet and
the web to transact business.
 Formally,ecomm is about digitally
enabled commercial transactions
between and among organisations
and individuals.
 Comm transactions involve the
exchange of value (eg.money)across
organisational or individual
boundraies in return of products and
services.
Features of E-Comm
 Ubiquity
 Global reach
 Universal standards
 Richness
 Interactivity
 Information density
 Personalisation/customization
Key concepts
 Digital markets
 Digital goods(goods deleivered over
digital
network.newspapers,magzines,video,
software etc)
Types of E-Comm
 Business to consumer(B2C)-involves
retailing products and services to individual
shoppers.
 Business to Business(B2B)-involves sales of
goods and services among
businesses.eg.chemconnects website for
buying and selling natural gas,chemicals
and plastics etc
 Consumer to Consumer(C2C)-involves
consumer selling directly to consumer.eg.e-
bay
The Internet and Electronic
Commerce
 Internet Business Models
 The last thing you want to do is throw up a Web site or a
Web page, include an email address, and call it done!
Regardless of the type of business, you have to
determine what you're going to do behind the scenes
and how your electronic commerce efforts will fit in
with your regular business processes.
 There is no simple step-by-step list of things you need to
do to establish an E-commerce process, no "one size fits
all" method. But remember these facts:
 • It's not cheap.
 • It's not easy.
 • It's not fast.
Internet Business Models

 Category Example
 Virtual Storefront : Amazon.com
 Marketplace Concentrator : ShopNow.com
 Information Broker : Travelocity.com
 Transaction Broker : Ameritrade.com
 Auction Clearinghouse : eBay.com
 Digital Product Delivery : Bluemountain.com
 Content Provider : WSJ.com
 On-line Service Provider : Tuneup.com

 The above egs. shows some ways companies use the

Internet to conduct business.
 The real lesson you should learn is that no business can afford
to rest on its laurels and assume its business or industry is safe
from changes caused by the Internet
Customer-Centered
Retailing
 Some of the most successful consumer E-commerce
companies have found that it isn't enough to set up a
Web site to sell products: consumers want
information about the products themselves and how
to integrate the products into their lives.
 Amazon.com, probably the most talked-about
consumer retail Web site, doesn't just sell books and
CDs. It also offers book reviews from other
customers, links to other books related to the one
they're purchasing and the opportunity to purchase
gifts for friends and relatives which are then gift-
wrapped and sent out. Amazon.com is moving into
other markets such as online auctions and now owns
part of an online grocery shopping service.
Disintermediation
 reintermediation, the process of creating new
middlemen,removing the middleman, helps to improve
profits while reducing prices. Many people are concerned
about selling products online because of the possibility of
fraud.
 Let's say you want to sell an antique car through your Web
site. A stranger in delhi emails you with an offer of
rs.100,000. You hesitate to seal the deal because you don't
know anything about this individual. You can use an
electronic escrow service that will hold the buyer's
funds to ensure he receives the merchandise while you
make sure you get paid.
 eg . eBay.com Online auction services offer a form of
reintermediation through their Web sites to get buyers
and sellers connected.
Business-to-Business E-
Commerce
 When you think of Internet-based business, you
probably think of businesses selling to individual
customers. It may surprise you to learn that business-
to-business is fastest growing area of E-commerce
and outpaces consumer retailing by millions of dollars.
 The Internet allows many smaller companies to
participate in government and private bids they
otherwise would be locked out of by bigger
competitors. Governments and companies that let out
the bids are finding that they get lower bids through
the Internet because of the increased number of
bidders.
Extra costs
 Let's say you've always gotten your office supplies
from the store down the street. Suddenly you
discover a Web site that offers lower prices. So you fill
up your shopping cart and purchase your supplies
from the Web site. But then you add in the shipping
and handling costs. Did you really come out ahead?
 If you're the one selling the product, you should make
sure your prices and extra costs are in line with your
competitor's. You also must make sure your company
can handle the possible increase in sales. All parts of
your organization should be involved in supporting the
E-commerce effort, not just one or two departments.
 One company, Asian Sources Online, has combined the two
into Asia's largest electronic commerce venture. "Asian
Sources established a Web site to connect thousands of
mostly small and medium-size
 Asian exporters of everything from hardware, fashion
and giftware to computers and electronic components
with big importers such as Kmart, Toys "R" us, Home
Depot, Tandy Radio Shack and Texas Instruments. A buyer
sitting in, say, Chicago can pay virtual visits to factories all
over Asia and see products without leaving his office.
 A buyer connects to the Asian Sources Web site,
views products from over 4,000 manufacturers,
orders the products, and arranges for shipment and
payment. Of course the buyers don't like the idea that
they can't take a two-week business trip to the
Orient any more, but that's another story.
Intranets and Electronic
Business
 How Intranets Support Electronic Business
 • Connectivity: Accessible from most computing
platforms
 • Can be tied to legacy systems and core transaction
databases
 • Can create interactivity applications with text,
audio, and video
 • Scalable to larger or smaller computing platforms
as requirements change
 • Easy to use, universal Web browser interface
 • Low start-up costs
 • Richer, more responsive information environment
 • Reduced information distribution costs
Intranet Applications for Electronic Business
Coordination and Supply Chain
Management
 An Intranet can drastically reduce an organization's
supply chain costs and management through
improved coordination between various departments.
It's possible that the production and shipping
departments are located in one building, and the
engineering department is located across town. The
engineers can waste a lot of time traveling back and forth
across town or simply fail to coordinate with production
altogether. An Intranet offers much improved coordination
between these departments.
 Outside suppliers have an advantage if they have
access to the company's Intranet because they stay up-
to-date on the latest design changes. They can also process
deliveries easier and faster by having access to information
that communicates the company's needs.
Organizing e-Business
Resources
 1. Human resources, in the form of people who can
design, create, and maintain web sites, are only a fraction
of the specialized talents required by businesses
considering an Internet presence.
 2. Material resources must also include specialized
computers, equipment, software, and high-speed Internet
connection lines.
 3. Informational resources, generally in the form of
reporting software that focuses on tracking the
efficiency of the web site operations and offers insight
into how satisfied customers are interacting with the firm’s
web site, are needed.
 4. Financial resources, the money required to start,
maintain, and allow the firm to grow, usually reflect
greater participation by individual entrepreneurs and
venture capitalists, instead of conventional financial
sources such as banks
Creating e-Business Profit
 Firms can increase their profits by either
increasing sales revenue or reducing expenses
through a variety of e-business activities.
 • Revenue Growth. A fundamental concern for
online firms is how to select, develop, and
nurture sources of revenues. Each source of
revenue flowing into the firm is referred to
metaphorically as a revenue stream.
 • Expense Reduction. Expense reduction is the
other major way in which e-business can help
increase profitability. Providing online access to
information customers can reduce the cost of dealing
with customers.
The Future of E-Business: Growth,
Opportunities, and Challenges
 Measurements of Growth. Measurements of e-business growth not only
illustrate the magnitude and scope of how much has happened in just a few
short years but also indicate trends for the future.
 • More than 61 percent of U.S. home Internet users go online every day–
often several times
 a day–compared with 57 percent in 1998 and 46 percent in 1997.
 • Home users spent an average of 7.2 hours a week online, about
the same as 1998, indicating home users have found a stable amount of
time to allocate to Internet activities.
 • Men still outnumber women slightly, but the growth in the number of
women users has risen steadily. In 1997 only 16.5 percent of women were
online and, by late 1999, that figure was up to 49 percent.
 • The average Internet user’s age has risen steadily as well, to 40 years,
up from 38.6 years
 in 1997.
 • The number of Internet users making purchases online nearly doubled
between 1998 and
 1999, going from 27 million to 52 million.
 • According to a Neilsen / NetRatings survey, 130 million people can
access the Internet from home, and some 80 million did in April 2000.
 In comparison to the home market, 35 million users
had access to the Internet at their places of work, and
nearly 31 million of them actively used the Internet. Both
groups of users spent about thirty minutes per session and
viewed an average of thirty-five pages. The primary
difference between these groups was in the number of
sessions per month, where those at work connected an
average of thirty-eight times per month, twice the
 number of those at home.
 • Global Internet users spent an average of 7.6 hours
online in March 2000, up from 7.17 average hours per
month in January 2000. The most time was spent by
Internet users from the United States and Canada with a
combined average of nearly thirteen hours per visitor per
month, while users in Europe spent on average just over
five hours on the Internet in March.
 Convergence of Technologies.
The phenomenon of overlapping
capabilities and the merging of
products and services into one fully
integrated interactive system is
referred to as the convergence of
technologies. We can expect to
see this tendency to help develop
interactive television programs,
which will allow viewers to pause, or
even select, a preferred direction for
a program.
 Online Communities. Online communities, which are
made up of groups of individuals as well as
 firms who in some way wish to exchange
information, products, or services over the
Internet are likely to grow.
 Partnering Online. Although opportunities will
continue to exist for independent e-business effort,
much success will continue to come from firms that
can cooperate and partner with others. By playing
 a partial role within a larger entity, smaller firms
can enjoy competitive advantage, access to
marketable items, and thereby increase their rate of
market penetration.
 You are a part of the most
revolutionary time in business.
Many companies are struggling with
all the changes and trying
desperately to comprehend their role
in the new world. You can help
yourself and your organization
tremendously by understanding the
issues involved and developing
innovative strategies to resolve the
problems.
THANKYOU
E-Commerce - Economic Drivers
 Economic drivers of e-commerce
some broad themes have emerged as
“important” for understanding the
economic and social impact of
electronic commerce
 Electronic Commerce Transforms
the MarketPlace
 Electronic Commerce has a
Catalytic Effect
 Electronic Commerce Growth
 Jobs and Skills