Introduction to E-Commerce

Introduction

 Surrounded with this new concept and its futuristic scenarios.

 Only in imagination
 TV advertisements , regular media coverage guide the consumers.
 Corporate are forced to reorganize with the introduction of e – commerce.
 Rapid growth – difficult to establish business model for comparison.
 Compared with rise of radio industry in 1920s, TV industry in 1950s and
Video Players in 1970s and PC industry in 1980s.
 Short – term as well as long – term potential
 Management needs to play larger role in formulation and implementation of
e – commerce strategies
 Cross – functional approach

Brief History of E- Commerce

 Need arises to make better use of computer technology.

 During 1970s – EFT
 During 1970s and early 1980s e-commerce became widespread in the form
of e-messaging technologies – EDI & e-mail.
 Business conducted with paper, now conducted electronically.
 EDI – send/receive business documents in standardized electronic form.
 Evolution of EDI over the years – retail category management.
 Retail Management – right product, at right price, at right place in the right
amount.
  In late 1980s and early 1990s e-commerce became integral part of business.
 In mid 1980s – introduction of online services.
 Encouraged social interaction – created a virtual community and gave rise to
concept of “ global village”.
 In 1990s – advent of www – a turning point

Definition

 “e – commerce is a general form of business transaction or information

exchange executed using ICTs.”
 e-commerce includes electronic trading of goods, services and electronic
material.
 “ Doing Business Online”

Different Definitions

“e-commerce is the delivery of information, products, services or payments via

telephone, computer networks or any other means.”

(Communication Perspective)

“e-commerce is the application of technology towards the automation of business

transaction and workflows”

(Business Process Perspective)

“e-commerce is a tool that addresses the desire of firms, consumers and

management to cut services costs while improving the quality of goods and
increasing the speed of service delivery”
(Service
Perspective)
“e-commerce provides the capability of buying and selling products and
information on the internet and other online services”
(Online Perspective)
Scope of E-Commerce
e-commerce system includes commercial transactions on the internet but their
scope is wider than that. They can classified by application type :

1. Electronic Market
2. EDI
3. Internet Commerce

Key Factors Influencing E-Commerce

(A) Economic Factors

 Cost reduction
 Competition
 Economic efficiencies
 Low cost technology infrastructure
 Low cost and accurate electronic transaction with suppliers
 Low cost global information sharing and advertising
 Low cost customer services
 Economic Forces – External and Internal
 External Integration – suppliers, large corporations, govt. agencies
etc.
 Internal Integration – production, shipping, billing and inventory
system
 (B) Marketing & Customer Interaction Factors
 Providing option to the marketing channel
 Improve post sale service
 Customer satisfaction by quality service
 Full knowledge about product and services
 To develop low cost customer – prospecting methods, close
relationship with customers, loyalty and retention of customers
(C) Technology Driven Factors
(D) Competitive Advantage
(E) Future Prospects

Benefits of E-Commerce

(A) For Organizations

 Creation of new market
 Easier entry into new market
 New sales channel
 Reduced entry cost
 New service opportunities
 Reduced time to complete business transaction
 Optimization of resource allocation
 Reduced inventories and related reduction of risk of obsolete
inventories
 Reduced errors, time and overhead costs in information processing
 Reduced overhead costs
 Cost leadership
 Differentiation
  Competitive advantage
 Reduced use of ecologically damaging materials
(B) For Consumers
 Reduced cost
 Better quality of goods and services
 Faster time to market
 Quick response
 Comparative analysis
 Home shopping
 Complete awareness and knowledge
 World-wide, 24 hours a day trading
 Bargain prices
 Home delivery
 Post sale services
 Online sale support
 Flexible payment system

Disadvantges Of E-Commerce

 Privacy and security

 Delivery
 Inspecting goods
 Social interaction
 Return of goods
 High-tech image
 Only for computer literate people
 Restricted reach