UNIT 4 ASSIGNMENT

Short notes (marks: 5 each)

a. Is ethics different from law? Explain?

Definition of Law

The law is described as the set of rules and regulation, created by the government to govern the
whole society. The law is universally accepted, recognized and enforced. It is created with the
purpose of maintaining social order, peace, justice in the society and to provide protection to the
general public and safeguard their interest. It is made after considering ethical principles and
moral values.

The law is made by the judicial system of the country. Every person in the country is bound to
follow the law. It clearly defines what a person must or must not do. So, in the case of the
breach of law may result in the punishment or penalty or sometimes both.

Definition of Ethics

By ethics, we mean that branch of moral philosophy that guides people about what is good or
bad. It is a collection of fundamental concepts and principles of an ideal human character. The
principles help us in making decisions regarding, what is right or wrong. It informs us about
how to act in a particular situation and make a judgment to make better choices for ourselves.

Ethics are the code of conduct agreed and adopted by the people. It sets a standard of how a
person should live and interact with other people.

Basis for
Comparison Law Ethics

The law refers to a systematic body Ethics is a branch of moral

Meaning of rules that governs the whole philosophy that guides people
society and the actions of its about the basic human conduct.
individual members.

What is it? Set of rules and regulations Set of guidelines

Individual, Legal and
Governed By Government Professional norms
Expressed and published in
Expression writing. They are abstract.

Violation of law is not permissible

Violation which may result in punishment like There is no punishment for
imprisonment or fine or both. violation of ethics.

Law is created with an intent to Ethics are made to help people

Objective maintain social order and peace in the to decide what is right or
society and provide protection to all the wrong and how to act.
citizens.

Ethics do not have a

Binding Law has a legal binding. binding nature.
 Long Questions (7 marks each)

a. How is e-banking related to e-commerce and m-commerce?

E-commerce in banking

E-Banking is a branch of E-Commerce that deals with the implementation of Information and
Communication Technology in Business Financial Management. E-banking has come a very
long way with millions spent on preparation of technological change just to make banking
services accessible to their customers from anywhere, at anytime by just a click of the mouse.

“E-commerce offers a level playing ground for large businesses, as well as small and
medium-scale enterprises (SMEs) to operate in the global market-place; and for regional
businesses and communities to participate in social, economic and cultural networks
seamlessly across international boundaries (Mary-Anne, 1998)”

E-banking is a remote delivery channel for banking services ranging from opening an
account, transferring funds to more complex form of online transactions like financial
product sale, like insurance and brokerage to bill payments and direct debits.

Making payments for goods and services in cash or non-cash forms as well as depositing
money in financial institutions and managing these resources are an inherent constituent of
economic life. Banks serve as important intermediates. In recent years, with the development
of technologies and techniques, options for communication with banks are expanding for
clients. New services are originating such as home banking, phone banking, internet banking
and others.

Electronic communication means are particularly coming to the forefront. These are more
convenient, faster, and often cheaper for clients. Banking experience shows it is suitable to
use combinations of several communication means, depending on individual segments,
clients, and types of operations, products and situations. Electronic banking is a service that
specifically uses electronic communication forms.

E-banking related to M-commerce

Mobile banking, m-banking, or SMS banking refers to online banking that occurs via mobile
phone or PDA rather than a PC. The earliest mobile banking services were offered over SMS,
but with the introduction of smartphones and Apple iOS,
 mobile banking is being offered primarily through applications as opposed to text messages
or a mobile browser.

Mobile banking reduces expenses by allowing customers to review transactions, transfer

funds, pay bills, and check balances without relatively expensive phone calls to a bank’s
customer service call center. More than half of all customer service calls already come from
mobile phones, and studies show consumers are twice as likely to have a cell phone than cash
when out and about. Younger consumers, who are most likely to carry cell phones, are also
heavy debit card users who require frequent balance checks.

Enhanced security with SMS transaction notifications and the ability to turn card accounts on
or off, and new technologies like mobile check deposit, in which you simply take a cell phone
picture of the check, are contributing to the increasing popularity of mobile banking.
Eventually, mobile phones may even replace ATMs and credit cards.

Ecommerce and mcommerce have different meanings, though both aim at making customers’
lives easier. Simply put, ecommerce is an umbrella term for selling and buying online, while
mobile commerce, or mcommerce, is a subcategory of ecommerce that focus on purchasing via
mobile devices.
Despite their similar goals of buying and selling with the help of the internet, there are many
glaring differences between ecommerce and m commerce.
 mCommerce eCommerce

Handheld devices such as smartphones

Devices used and tablets Computers, laptops, …

Connection-
dependency Mandatory (*) Mandatory (*)

With push notifications in place, mobile

commerce can reach a wider range of
Reachability users even when they’re on the go. Limited

Low: Users can make

High: Users can make transactions transactions on their computers
everywhere as long as they are and laptops with limited
Mobility connected to the Internet. mobility

User Experience on mobile devices is Harder to navigate in the

optimized for as little taps-on-screen desktop websites of eCommerce
Ease of Use per transaction as possible stores.

Platform Web stores and native apps Web stores

Payment Caller’s rate, mobile banking or user’s

Gateway credit card Credit Cards

Location-
tracking
capability Yes No

Rely on the web security combined

Security with built-in mobile security features Rely mainly on the web security

The major differences between e-commerce and m-commerce are explained below:
1. e-commerce is defined as the performance of business activities with the use of the
internet. When any sort of commercial transaction is transacted with the use of cellular
devices, it is known as m-commerce.
2. e-commerce is an older concept than m-commerce.
3. m-commerce is originally developed on the lines of e-commerce. So it can be said that
m-commerce is a part of e-commerce.
 4. e-commerce activities are concluded with the help of computers and laptops, whereas in
m-commerce, smartphones, tablets, iPad, PDA’s (Personal Digital Assistant), etc. are
used.
5. In e-commerce, the use of the internet is compulsory but in the case of m-commerce the
use of the internet is not mandatory.
6. The connectivity of m-commerce is comparatively larger than e-commerce.
7. m-commerce devices are easy to carry anywhere because they are light weighted which
is not possible with e-commerce.

Conclusion

e-commerce and m-commerce have played a revolutionary role in changing the lifestyle of the
people. Apparently, it saved their time and cost. In traditional commerce, people do not have
many options, but now they can explore and make better choices. They will not get cheated
with low or substandard or defective items. Also they will not get fooled by the attractive
advertisements because they can read the reviews of existing customers to decide whether to
buy the product or not.
b. Identify the industries who have taken full benefit of e- commerce. Justify your
findings.

 E-COMMERCE IN TRAVEL INDUSTRY

E-commerce has changed the whole concept of travel and tourism. Both consumers and the
industry are taking advantage of e-commerce and expanding their businesses for good. With
this huge phase of expansion, let us take a look at how it has been beneficial for travel and
tourism industry.

1. Online Booking

Customers are no more required to visit offices and travel agents anymore. The whole
booking system is online with a feasible payment system. Every system works individually
but the integration of this set-up is helping to build and increase business.

2. Managing Recessions

The e-commerce industry has amazingly affected recessions. A recession is the period of loss
that lasts for almost six months. E-commerce technology has introduced the quick recovery
of recession through its ideal solutions to the problems that arise.

3. Automation and Networking

GPS is one of the greatest technologies that helps you in the industry of travel and tourism. If
you’ll look up any of the transportation services, e-commerce is the one thing that is helping
you to connect and offer the best services to the consumers.

4. Additional Global Market

E-Commerce technology gives you better know-how about the additional market. The travel
industry is not limited to a country or a city but it is globally targeting its customers. People
can now book their trips to the exotic destinations from anywhere, such as their office or even
the comfort of their own homes. E- commerce allows you to connect to the additional market
around the world and provide the most feasible services to your clients, even if they are
located overseas.
5. Ease of Accessibility

The planning and the strategy processes of business are now as easy as reaching out to the
market. The travel agents can now get to know more about the competitors and plan their
business accordingly. Apart from the bulk of information, it provides to the ease of
accessibility to the customers and competitor behaviour. It makes it all easy for people to
connect and grow together.

Furthermore, E-commerce technology provides you with many ways to enhance your
business with ease. Just one click and the work is done, payment, booking, monitoring
customer behaviour, business plans and marketing strategies are now at the fingertips of
every businessman or woman.

The industry of travel and tourism is now dependent on E-commerce, it provides practical
ideas to implement and plan anything in advance from cheap solo travel excursions to hefty
family holiday packages. You can book last minute deals too. The best aspect is the global
availability as well as the accurate information on hotels and the places to visit which are
usually backed up by trustworthy customer reviews.

 ONLINE REAL ESTATE SERVICE INDUSTRY

An electronic version of the real estate industry, internet real estate is the concept of
publishing housing estates for sale or rent, and for consumers seeking to buy or rent a
property. Often, internet real estates are operated by landlords themselves. However, there are
few exceptions where an online real estate agent would exist, still dealing via the web and
often stating a flat-fee and not a commission based on percentage of total sales. Internet real
estate surfaced around 1999 when technology advanced and statistics prove that more than 1
million homes were sold by the owners themselves in just America, in 2000. [1] Some of the
prime internet real estate platforms include Zillow, Trulia, Yahoo! Real Estate, Redfin and
Realtor.com

The real estate sector is one of the most globally recognized sectors. Real estate sector
comprises four sub sectors - housing, retail, hospitality, and commercial. The growth of this
sector is well complemented by the growth of the corporate environment and the demand for
office space as well as urban and semi-urban accommodations. The construction industry
ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all
sectors of the economy.
It is also expected that this sector will incur more non-resident Indian (NRI) investments in
both the short term and the long term. Bengaluru is expected to be the most favoured property
investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and
Dehradun.

ADVANTAGES

The benefit of Saving Time:

You can save an immense amount of time by not actually visiting the place and instead of
going online. You clearly deduct the time of traveling and can jump from one site to other in
a matter of seconds. You don’t need to deal with the traffic and weather problems too. You
can do it anytime you want to regardless of other factors like your realtor or person whose
site you are going to visit is free or not.

The benefit of Comparison:

It happens many times that your realtor or the person who is selling the property may lie
about the pricing of the property. When you check online or post an inquiry in multiple sites,
you can compare prices of different sellers for the same area and sometimes you can also
have the same site uploaded by different realtors. All these give you a clear idea of pricing
and also gives you the power of bargain as an online platform is more competitive as well as
transparent.

The benefit of Convenience:

There are many mediums when it comes to the actual ground visit to a property. When you
search online you are master of your own will. You can do all the research initially and that
also at your convenience. You can use your leisure time while commuting or even late at
night. Nowadays most of the websites are providing Streetview, so you can easily see the
surroundings and other specifications without actually visiting the place.

The benefit of Comparison:

This is one of the best features for searching online for the property. You can get two
properties in different areas and different locations on the same screen. You can see the actual
difference between the two sites and have data which is better and why. Nowadays realtor
websites take utmost care to provide actual data because of this feature. Some sites only
provide a comparison between different websites. Thus this is an important factor to search
online.
The benefit of Eliminating Mediums:

There are a few platforms online where you can directly meet the seller and get genuine
pricing without the interruption of other mediators. Here you can even get details of the seller
and you can even ask for a live tour with video calling to check how the genuine the seller is.

Thus all these are the benefits of searching properties online. It is best you research and
shortlist first and fix appointments online. This will save a lot of time. Thereafter before
making the actual purchase, you can physically visit the site.
c. Discuss the ethical issues raised by e-commerce.

Ethical issues raised by E-commerce are:-

 Web tracking

Every time someone visit the web, the website system retains some trails of the users that can
be refer later, this trails are normal call logs. These logs contains all the records pertains to
what the users perform in the site. Logs as records mean, they can be retrieve or save for later
use.

Analysis of log file means turning log data into application service or installing software that
can pluck relevant information from files in-house. Companies track individual’s movement
through tracking software and cookie analysis. Programs such as cookies raise a batch of
privacy concerns. The tracking history is stored on your PC’s hard disk, and any time you
revisit a website, the computer knows it. Many smart end users install programs such as
Cookie cutters, Spam Butcher, etc which can provide users some control over the cookies.
The battle between computer end users and web trackers is always going on with a range of
application programs. For example, software such as Privacy Guardian, My Privacy, etc can
protect user’s online privacy by erasing browser’s cache, surfing history and cookies. To
detect and remove spyware specially designed programs like Ad-Aware are present. A data
miner application, collects and combines Internet browsing history of users and sends it to
servers. The battle goes on!

 Online Privacy

Most Electronic Payment Systems knows the identity of the buyer. So it is necessary to
protect the identity of a buyer who uses Electronic Payment System. A privacy issue related
to the employees of company is tracking. Monitoring systems are installed in many
companies to monitor e-mail and other web activities in order to identify employees who
extensively use business hours for non-business activities. The e-commerce activities
performed by a buyer can be tracked by organizations. These activities of monitoring
customers raise ethical issues on how secure and anonymous information are being handle by
the e- commerce providers.
  Web Spoofing

Web spoofing is an electronic deception relates to the Internet. It occurs when the attacker
sets up a fake website which almost totally same with the original website in order to lure
consumers to give their credit card number or other personal information. For example is the
attacker setup a site called www.jumiaa.com using addiction of later ‘a’ at the end, which
many users sometimes type by mistake. Users might find themselves in a situation that they
do not notice they are using a bogus web-site and give their credit card details or other
information.

 Cyber-Squatting

Cybersquatting is an activity which a person or firm register, purchase and uses the existing
domain name belong to the well-known organization for the purpose of infringing its
trademarks. This type of person or firm, called cyber-squatters usually infringed the
trademarks to extort the payment from original trademark’s owner. The extortion of payment
occur when they offers the prices far greater than they had purchased the organization’s
domain name upon. Some cyber- squatters put up offensive remarks about the person or
company which the domain is meant to represent in an effort to encourage the subject to re-
buy their domain from them.

 Privacy Invasion

The privacy invasion occur when the personal details belong to consumers are exposed to the
unauthorized party. These can be seen in the following ways.

 The personal information of consumers being transmit may be intercepted by anyone

other than the person whom it is intended. Protecting the privacy of communication is
a great challenge, due to the very nature of the online medium, an open network of
digital telecommunications. It is technically and economically impossible to patch all
the holes through which unauthorized intruders may gain access.
 Malicious programs delivered quietly via web pages could reveal credit card numbers,
usernames, and passwords that are frequently stored in special files called cookies.
Because the internet is stateless and cannot remember a response from one web page
view to another, cookies help solve the problem of remembering customer order
information or usernames or passwords.

 Email Spamming & phishing

E-mail spamming involved unsolicited commercial e-mail (UCE) sent or broadcast unwanted
advertisement or correspondence over the Internet. The use
of e-mail spammers meant to lure consumers to enter their personal information on fake
website using e-mail, forged to look like it is from authorized organization such as bank. The
content of e-mail often directs the consumers to the fake website in order to lure them to fill
their personal information such as credit card or bank account’s details. This technique is
called phishing. And these illegal process easily compromised the user's right and expose to
danger.

 Intellectual Property Theft and Copyright Trolls

The basic cut-and-paste allows anyone with Internet access to directly copy the original
works of another. Text, photos, music, artwork and ideas routinely move from the creators to
the copiers, with no permission for use granted or sought. The victim of this theft only has
recourse if he's registered a copyright and then wants to spend the time and trouble to write
demand letters and threaten lawsuits. At the other end of the ethical spectrum, "copyright
trolls" buy the rights to movies, books and music, threaten mass lawsuits against thousands of
people found to be downloading the material and demand a quick settlement from each of
them.
 Long Questions (8 marks each)

a. Discuss the application of E-commerce in E-Procurement brining out its advantages

and disadvantages.

Procurement departments are found in most of the organization. There are responsible for
purchase of raw material, office supplies, office equipment, facility maintenance, etc. It is
important for them to know and understand the e- procurement concept so that they can add
efficiency and effectiveness to the whole process.

Procurement managers must have complete understanding of various e- procurement

applications. He must be able to identify processes, which can make procurement effective.
He should have understanding of e-procurement benefit. He should understand risk
associated with e-procurement implementation.

E-procurement Tools and Application

There are several tools and application which fall under e-procurement some of them
are as follows:

 In electronic data interchange system, procurement messages are exchange between

computers of two separate organizations. Message is exchange in batch and can be
easily transmitted and stored. EDI is mostly used for order transmission, order
confirmation, logistic information and order invoicing.
 Enterprise resource planning system have separate module to handle the procurement
function.
 Internet based tools and resources help in the process of procurement. Some of the
common applications are email, internet based EDI, XML based data exchange via
the internet etc. Internet provides tools for e- sourcing, e-tendering, e-auctioning, e-
ordering and e-catalogue.
 E-sourcing tool is used to identify potential suppliers during the selection phase. E-
tendering tool is used to send out tenders with procurement requirements, supply
schedule, contracting terms, etc. E-auctioning tools bring together potential supplier
identified during selection phase under one umbrella to undertake auctioning process.
E-auctioning tools operate under two separate mechanism, upward price mechanism
for selling organization and downward price mechanism for the buying organization.
E-ordering tool is used procurement of office supplies and services; it is accessible by
all employees within the organization and is mainly used for ad-hoc purchases. A
web-based ERP tool is used for product-related
 purchases, is exclusively used by the procurement department, and falls under a
planned process.

A traditional procurement process starts with phase requirement definition, sourcing,

solicitation, evaluation, contracting and contract management. In the internet based this steps
are replaced by e-sourcing, e-tendering, e-reverse auction, e-ordering and web based ERP.

ADVANTAGES

Reduced Costs

E-procurement saves you money by preventing duplicate spending, leveraging volume

buying, and saving you costs associated with paper-based systems (for example, the cost of
stamps to mail your paperwork).

Transparent Spending

Electronically conducting your procurement makes it easier to write and analyze reports on
your procurement systems, meaning you can ensure that your procurement procedures
conform to your policies.

Increased Productivity

Once you’ve learned the system, e-procurement is less time-consuming than traditional
procurement. Having your records stored electronically makes it easier to submit reusable
tenders. Meanwhile, use of templates means paperwork can be filled out more quickly.

Eliminating Paperwork

Tired of finding new space to store all that paperwork? With e-procurement, everything can
be saved and stored electronically. This not only saves you from needing more room, it also
makes the process of finding older tenders more simple.

Increased Transaction Speed

E-procurement is both time-saving and efficient. As the electronic handling of tasks supports
and simplifies the purchasing process, transaction speed is increased. Also, because of e-
enabled relationships with suppliers, procurement cycle times speed up. The e-procurement
process eliminates unnecessary activities, allowing you to focus on more valuable tasks.
Standardized Buying

When you have various departments making procurement decisions, there can be differences
in what and how they purchase. Conducting purchasing electronically makes it easier for
every department to conform to company procurement standards.

Reduced Errors

Electronic paperwork is streamlined and thus easier to check for errors—there’s no messy
printing to get in the way either. Along with this, past orders are more easily referenced,
meaning there’s a greater chance that your company can compare orders to ensure new ones
are correct.

DISADVANTAGES

Culture Shock, i.e., difficulties related to obtaining both literal and figurative investment in
digital transformation due to a lack of information, perceived limitations of the software
itself, or a corporate culture reluctant to move beyond traditional models of procurement
processing.

Situation-Specific Integration Issues, usually related to a lack of planning, poor or

incomplete understanding of the goals being addressed through implementation, or confusion
and ignorance related to the capabilities and functionality of the chosen E-Procurement
software.
b. What are the attributes of m-commerce which offer new applications and are
applicable in only mobile environment?

Mobile e-commerce (m-commerce) is a term that describes online sales transactions that use
wireless electronic devices such as hand-held computers, mobile phones or laptops. These
wireless devices interact with computer networks that have the ability to conduct online
merchandise purchases. Any type of cash exchange is referred to as an e-commerce
transaction. Mobile e- commerce is just one of the many subsets of electronic commerce.
Mobile e- commerce may also be known as mobile commerce.
ATTRIBUTES
Specific Attributes of Mobile Computing and M-Commerce
Mobile computing has two major characteristics that differentiate it from other forms of
computing: mobility and broad reach.

Mobility
Mobile computing and m-commerce are based on the fact that users carry a mobile device
anywhere they go. Mobility implies portability. Therefore, users can initiate a real-time
contact with other systems from wherever they happen to be if they can connect to a wireless
network.

Broad Reach
In mobile computing, people can be reached at any time. Of course, users can block certain
hours or certain messages, but when users carry an open mobile device, they can be reached
instantly. These two characteristics break the barriers of geography and time. They create
the following five value-added attributes that the development of m-commerce: ubiquity,
convenience, instant connectivity, personalization, and localization of products and
services.

Fast Processing
One important characteristic of mobile commerce is that it allows the user to process a
transaction fast. Not only does the customer receive his item almost instantly via
download, e-mail or another form of electronic delivery, the business owner receives
payment for his product or service more quickly compared to traditional methods. The
customer must set up a payment option, such as a credit card or an agreement to pay using
a specified account, to process the payment immediately before downloading the item. Of
course, the speed of delivery is dependent on the reliability of the Internet and network
services.

Reduced Business Costs

Mobile commerce also helps reduce costs for the seller. She rarely needs to pay for a
separate office space, overhead costs or employees. In some cases a small business owner
who sets up a mobile commerce operation doesn't need an office at all. The seller can
monitor sales online or by receiving statements from a processing service. The main expense
for this type of business owner is advertising to disseminate information on how users can
access the product or service. The lowered cost allows the business owner to take advantage
of a higher per-sale profit. He also can offer the product at a lower price compared to
delivery in other formats.

Little Need for Maintenance

Another characteristic of mobile commerce is that it requires very little maintenance from
the seller. The owner sets the product up for mobile delivery one time and then receives
payment for sales automatically. From time to time, he may need to perform a few
maintenance duties, such as correcting a technology error or updating the product, but
overall it is a selling format that requires very little management compared with other
selling strategies.
Widespread Availability of Mobile Devices.
According to Romow.com (2008), 50 percent of the world population will use mobile phones
in 2008. It is estimated that within a few years, about 70 percent of cell phones will have
Internet access (“smart-phones”). Thus, a potential mass market is available for conducting
discovery, communication, collaboration, (e.g.,see “Global Mobile,” a special report,
Computer World, May 14,2007), and m-commerce. Cell phones are spreading quickly even
in developing countries.

No Need for a PC
Today’s PDAs and some cell phones have as much processing power as personal computers
did just a few years ago, and possess the range of software available to PC users. This
suggests that the smart phone-not the PC-may soon become the foremost tool that connects
people to the Internet.

The Handset Culture

Another driver of m-commerce is the widespread use of cell phones, which is a social
phenomenon, especially among the 15-to-25-year-old age group. These
users will constitute a major force of online buyers once they begin to make and spend larger
amounts of money. The use of SMS has been spreading like wildfire in several European and
Asian countries. In the Philippines, for example SMS is a national phenomenon, especially in
the youth market. As another example, Japanese send many more messages though mobile
phones than do Americans, who prefer the desktop or laptop for e-mail.

Declining Prices and Increased Functionalities

The price of wireless devices is declining, and the per-minute pricing of mobile services
declined by 50 percent in recent years. At the same time, functionalities are increasing. Also,
a flat fee (e.g., monthly) encourages more use of mobile devices.
Improvement of Bandwidth
To properly conduct m-commerce, it is necessary to have sufficient bandwidth for
transmitting text; however, bandwidth is also required for voice, video, and multimedia. The
3G (third-generation) and 3.5G technologies (described in Chapter 4) provide the necessary
band width.
 c. Discuss the major applications of E-commerce in Supply chain using examples.

A supply chain is a network of facilities and distribution options that performs the functions
of procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers. Supply chains exist in
both service andmanufacturing organizations, although the complexity of the chain may vary
greatly from industry to industry and firm to firm. Below is an example of a very simple
supply chain for a single product, where raw material is procured from vendors, transformed
into finished goods in a single step, and then transported to distribution centers, and
ultimately, customers. Realistic supply chains have multiple end products with shared
components, facilities and capacities. The flow of materials is not always along an
arborescent network, various modes of transportation may be considered, and the bill of
materials for the end items may be both deep and large.

A supply chain is a system of organizations, people, activities, information, and resources

involved in moving a product or service from supplier to customer. Supply chain activities
involve the transformation of natural resources, raw materials, and components into a
finished product that is delivered to the end customer.[2] In sophisticated supply chain
systems, used products may re-enter the supply chain at any point where residual value is
recyclable. Supply chains link value chains.(Source:Wiki)

Then a supply chain based e-commerce platform is who uses of such a chain to operate and
make profits. Domestic operation of such platforms is much easier to go, and I will be
focusing on cross-border e-commerce platform.

A cross-border e-commerce has a rather long supply chain, in which, supplier, logistic,
customs clearance and choice of goods are the four critical points.

I. Supplier: there are mainly four kinds of them.

1. agent/distributor

2. manufacturer

3. supermarket/store

4. buyer.
II . Logistics

Direct delivery from foreign suppliers to domestic buyers.

It is highly recommended to partner with leaders in this industry given your actual situations.

Among others, DHL, TNT.

Example: Amazon(consumer goods), JumoreGlobal (bulk commodities)

Delivery from tariff-free zones.

In this case, you cut the transport into two sections, the part between the supplier and the
customs, and the part between customs clearance and final buyer. Logistic providers play a
critical role in this process, so pick reliable ones.

Example: Tmall, Xiaohongshu(consumer goods).

III. Customs Clearance

It usually takes different lengths of time to get this done given the batches of goods, and
random check will be faster.

IV. Choice of goods

It’s no exaggeration to call it the life line of for cross-border e-commerce platforms engaging
in the trading of consumer goods. In choosing products, the first thing a platform considers is
whether these goods will be hot, the opportunity to get dealership or profitability will come
next. As to bulk commodities, decisive factors will be trends on global markets.
 d. Discuss the taxation issues on E-Commerce transactions over the Internet.

Due to absence of national boundaries, physical presence of goods and non- requirement of
physical delivery, taxation of e-commerce transactions raises several issues. They have to be
understood in the light of international taxation. International taxation arises from cross
border transactions for the reason that the author of the transactions arises in one country
(called the Home State) and the sites of the transactions is in the other country (Host State).
Income arising out of such transaction is subject to tax in both countries by virtue of personal
attachment to the transfer (in the Home State) and again by virtue of economic attachment to
the income itself (in the Host State). Thus, this gives rise to double taxation of the same
income. This problem is generally solved by a Double Taxation Avoidance Agreement
(DTAA) between the two countries concerned.

The major taxation problem of e-commerce is that no establishment is necessary across the
border to carry on business. With regard to tangible property, the source can be traced, as the
delivery has to cross the other territory through the customs or postal barrier. The destination
also will be known from the shipping address. Where the seller is located in a tax-haven
country, it becomes difficult to enforce tax laws on the non-resident business. In such cases,
the natural option should be to tax the resident as the agent, especially where the non-resident
cannot be reached. The difficulty is not so much in taxing those who are assessed and who
maintain accounts but in taxing others who do business and there is no record of their
transactions, like the persons liable to pay the use tax in US. With the development of WAP
(Wireless Application Protocol) which integrates mobile telephony with the Internet, e-
commerce will be taken over by Mcommerce (Mobile Commerce). This makes the place of
origin of business invisible thus adding complication to the existing scenario and is a real
challenge to domestic jurisprudence.
Legal difficulty
Till now all cross-border commercial transactions have to cross the customs barrier or the
postal barrier. All trade and commerce are operated in a physical world and in terms of
tangible goods. Hence, there is a check on these transactions, though smuggling remains
outside the scope of any control. Even in the present situation, the tax authorities are unable
to fully grapple with the problem of myriad ways of tax evasion. In e-commerce transactions,
the contracting parties are in two different states and, therefore, the question would
Arise as to which state law would be applied.

Nature of contract
A contract need not necessarily be in writing unless, the statute requires it to be so. It can be
oral. This will create problems relating to the law that will be applicable in case of dispute. In
a contract, generally the parties are free of choose the law applicable to the contract and the
same can be expressed or implied in the terms of the contract. In some cases, the principal
place of business is relevant in deciding the law applicable. In some other case, the place
where the buyer normally resides decides the law to be applied. Where there is a clause for
retention of title until the buyer performs some act, then the matter of which lex situs will
govern the validity clause is open to question. In answering this, the Rome Convention says
that if the contract accords with the rules of anyone of the States, its validity cannot be
questioned. This would be the most satisfactory solution and can be followed. All these
problems arise mostly regarding transactions relating to movables and those relating to
immovable properties are less difficult. There are many areas where the present domestic
laws including international laws would be inadequate to deal with the emerging new field of
ecommerce.

Taxable jurisdiction
The taxable jurisdiction of any country covers its national boundary. Besides this the
territorial jurisdiction includes territorial sea and airspace above as per the territorial waters,
continental shelf, exclusive economic zone and other Maritime Zones Act, 1976. Each one
extends to specified nautical miles from the base line. But electronic commerce takes place
through satellite and the server can be in any part of the globe. It can in all probability be in a
tax-haven country. Another condition for taxing the income arising or accruing beyond the
taxable territories is the physical residence of the taxpayer for 182 days or more. This
becomes meaningless with the Internet access.