1.

E-commerce Introduction

1.1 E-commerce History

E-commerce was first developed in 1970 with the innovation of electronic funds transfer

(EFT) that allows funds to be routed electronically from one organization to another. In its first

introduction, it was mainly used by big corporations, financial institutions or few other businesses

only. With the invasion of electronic data interchange (EDI), a technology that was originally used to

transfer routine document and financial transaction with the purpose of exchanging business

information and transaction, the opportunity for other corporations from other fields such as

manufactures, retailer, services and other types of business to participate and send and receive

commercial documentation electronically was created (Zareii & Gilaninia, 2015).

The introduction of Amazon.com in the year 1994 by Jeff Bezos was the starting point of e-

commerce that is well-known and used publicly. In that year, it was reported that e-commerce

began successfully and gained popularity. The successful development of e-commerce is related

to the successful development of the security protocols (for example, HTTP) and DSL which allows

rapid access and a persistent connection. Since then, the use of e-commerce has continued to

increase. In July 1995, a complete e-commerce with the capability to exchange e-money and the

use of database was implemented, while in January 1997, an e-commerce system with all possible

capabilities was implemented (Zareii & Gilaninia, 2015).

Table 2.1. The classification of e-commerce

Classification Description

Business-to-Business (B2B) E-commerce model in which all of the

participants are businesses entities or
other organizations

Business-to-Consumer (B2C) E-commerce model in which business

sell to individual shoppers. E-tailing is
usually B2C
 Business-to-Business-to- E-commerce model in which a
Consumer business provides some products or
(B2B2C) services to a client business that
maintains its own customers

Consumer-to-Business (C2B) E-commerce model in which

individuals use the Internet to sell
products or services to organizations
or Individuals who seek sellers to bid
on products or services they need.

Intrabusiness EC E-commerce category that includes

all internal organizational activities that
involves the exchange of goods,
services, or information among
various units and individuals in an
organization

Business-to-Employees(B2E) E-commerce model in which

organization delivers services,
information, or products to its
individual employees

Consumer-to-consumer(C2C) E-commerce model in which

consumers sell directly to other
consumers.

Collaborative Commerce (C- E-commerce model in which

commerce) individual or groups communicate or
collaborate online

*source: Adapted from Turban et al. (2012)

The evolution of information and communications technology (ICT) in the era of 2000 has

led to the rapid growth of e-commerce. Many e-commerce applications had been developed and

introduced during this era. It was reported that in the year of 2000, around 8 million people across

the world shopped online. This is a key indicator that e-commerce has been well accepted by its

participants which include general public and government sector in addition to organization and

business entities. The variation of e-commerce participants indirectly defines the classification of
e-commerce (as shown in Table 2.1) by portraying the relationship among the participants (Turban

et al., 2012). As Internet technology (IT) reached its second generation, which is Web.2.0, the e-

commerce also evolved. A new term in e-commerce has been introduced which is the s-

commerce, whereby the social media tools are used in order to accomplish the purpose of s-

commerce. The evolution of e-commerce which is in line with the growth of ICT has shown that the

definition, dimension and framework of e-commerce itself have emerged.

1.2 E-commerce Definition and Framework

E-commerce covers a broad range of issues, technologies, applications and business

models. Therefore, it has a wide variety of definitions given by both academics and practitioners.

However, the basic definition is buying or selling products and services over the Internet (Roos,

2008). As mentioned previously, e-commerce is strongly related to the growth of ICT. Therefore,

the main elements in defining e-commerce are not the products and services only but also

information as well. Hence, the definition of e-commerce has expanded to business processes that

cover not only buying and selling but also researching, transferring and exchanging products and

services information as well as the process of bidding on online auction whether or not the actual

transaction and buying are involved (Roos, 2008; Turban et al, 2012). Molla and Licker (2001)

emphasized that in any definition of e-commerce, it is important to identify and consider the type

of network architecture, the application solution, the business function performed or supported and

the parties involved in the electronic relationship.

Turban et al. (2012) stated that the degree of digitalization (the transformation from

physical to digital) of the i) ordering system (order, payment), ii) processing (e.g. create

products/services) and iii) shipment (delivery), as shown in Figure 2.1 plays an important role in

indicating the forms of e-commerce and to differentiate e-commerce from traditional commerce.

E-commerce can be in the form of pure e-commerce where the three important aspects including
the ordering system, process and shipment are digitalized and partial e-commerce where one or

two of the important areas (ordering system, process and shipment) are digitalized.

Furthermore, Figure 2.2 displays the framework of e-commerce. It shows that many

components are needed to be in place and well identified to follow electronic adjuncts to make sure

the business activity is successful. Understanding the e-commerce framework is essential since it

provides details on how e-commerce takes place, how e-commerce is implemented, how online

business can be done and defines the important components that should be present for the

transactions.

*Source: Turban et al. (2012)

Figure 2.1. The dimensions of e-commerce

1.3 E-commerce Success Factors

 The concept of success factors was introduced by D. Ronald Daniel in the 1960s. This idea

has received much attention from researchers and managers since then. Although at the beginning

its introduction, the managers had been using it to define the key information needed by top

management, it was later found out to be able to define the area of activity that should receive

constant and careful attention (Rockart, 1979). This implies that there are variations in success

factors depending on the perspective of the aim of the research conducted.

Ever since the introduction of e-commerce, both academics and practitioners have been

motivated to conduct studies on the matter regarding the success factors for e-commerce system

(e.g. Molla & Licker, 2001). The steady growth (e.g. the increasing global community of online

shoppers in e-commerce) of e-commerce is the reason behind many attempts to measure the

success of e-commerce. Success factors are defined as the research on investigating, exploring

and identifying e-commerce success factors to give useful direction for future development of e-

commerce.
 *Source: Turban et al. (2012)

Fig 2.2. A framework for e-commerce

It cannot be denied that the e-commerce system not only shares some similarities with

information system (IS) but it can also be considered as a kind of IS, indicating that e-commerce

acts as information provider (Molla and Licker, 2001). The provision of information is the core of

any e-commerce system. It can be seen through any e-commerce activities and transactions such

as delivering products/services which are always accompanied by information provided to assist

customers. Therefore, e-commerce itself has the capability to capture, process and present

information to support customer and business decision making. Based on this relation (e-

commerce system and IS), the IS success model by DeLone and McLean (1992:2003) has been

used and referred as a basis in the discussion of e-commerce success factors. Many researchers

have since sought to extend and/or validate this IS model on the studies of e-commerce success

factors.

References

DeLone, W.H. & McLean, E.R. (1992). Information systems success: the quest for the dependent

variable. Information Systems Research, 3(1), 60-95.

DeLone, W.H. & McLean, E.R. (2003). The DeLone and McLean model of information systems

success: a Ten-year update. Journal of Management Information Systems , 19(4), 9-30.

Molla, A. & Licker, P.S. (2001). E-commerce systems success: an attempt to extend and respecify

the DeLone and McLean model of IS success. Journal of Electronic Commerce Success, 2(4),

1-11

Rockart, J, F.(1979). Chief Executives Define Their Own Data Needs. Harvard Business Review, 81-

92.

Roos, D. (15 April 2008). The history of E-commerce. HowStuffWorks.com. available at:

http://money.howsuffworks.com/history-e-commerce.htm.

Turban, E., King, D., Lee, J., Liang, T.P. & Turban, D. (2012). Electronic commerce 2012: A

Managerial and Social Networks Perspective. 7th Edition. Prentice Hall. Bostan.

Zareii, R. & Gilaninia, S. (2015). E-commerce and the importance its dimension in the marketing.

Universal Journal of Management and Social Sciences, 5(4), 1-8.