UNIT 1

E-commerce also known as Electronic Commerce, refers to buying and

selling of products or services over the Internet. Normally e-commerce is
used to refer to the sale of physical products online, but it can also describe
any kind of commercial transaction that is facilitated through the internet.

The first ever online sale was in 1994 when a man sold a CD by the band
Sting to his friend through his website Net Market, an American retail
platform. This is the first example of a consumer buying a product from a
business through the World Wide Web or e-commerce as we commonly
know it today. After that e-commerce has evolved to make products easier
to discover and purchase through online retailers and marketplaces. All
freelancers as well as small and large businesses have been benefited from
e-commerce which enables them to sell their goods and services at a scale
that was not possible with traditional offline retail.

Types of E-commerce model:

There are basically 4 main types of e-commerce models that can describe
almost every transaction that takes place between consumers and
businesses.
1. Business to Consumer (B2C):
When a good or service is sold to an individual consumer by a business,
e.g., we buy a pair of shoes from an online retailer.
2. Business to Business (B2B):
When a good or service is sold by a business to another business, e.g., a
software-as-a-service is sold by a business for other businesses to use.
3. Consumer to Consumer (C2C):
When a good or service is sold by a consumer to another consumer,
e.g., we sell our old furniture on eBay to another consumer.
4. Consumer to Business (C2B):
When a consumer’s own products or services is sold to a business or
organization, e.g., an authority offers exposure to their online audience
in exchange for a fee or a photographer licenses their photo for a
business to use.
Business Application of E-commerce:
 Conversational commerce: e-commerce via chat
 Digital Wallet
 Document automation in supply chain and logistics
 Electronic tickets
 Enterprise content management
 Group buying
 Instant messaging
 Newsgroups
 Online banking
 Online office suites
 Online shopping and order tracking
 Pretail
 Print on demand
 Shopping cart software
 Social networking
 Teleconferencing
 Virtual assistant (artificial intelligence)
 Domestic and international payment systems

Advantages of E-commerce:
 E-commerce enables fast and secure shopping.
 It is making digitalized world.
 E-commerce also enables to choose different goods and services
according to your choice.
 It is a simple way of selling and buying products and services.
 E-commerce replaced the paper work as all transactions are through
internet today.
 It provides better management system, as it has a centralized database.
 E-commerce via internet covers a large number of customers worldwide.
Disadvantages of E-commerce:
 E-commerce has no universal standard for quality and reliability.
 E-commerce works through internet, it is possible that navigation on
internet itself may be slow.
 Strong security is required in e-commerce as all transactions are
through internet.
 There is high risk of buying unsatisfactory products through e-
commerce.
 It uses public key infrastructure which is not safe.
 Customers also trap in banking fraud which is quite frequent.
 Hackers also try to get access of data or to destroy data in e-commerce.
PART 2

Internet:
Internet is used to connect different network of computers simultaneously.
It is a public network therefore anyone can access the internet. In internet,
there are multiple users and it provides unlimited number of information to
the users.
Intranet:
Intranet is owned by a single organization and is a tool for sharing
information throughout the organization. It is the type of Internet that is
used privately. Since, intranet is a private network so no one can use the
intranet whose have not valid username and password. In intranet, there
are a limited number of connected devices as compared to internet.
Intranet is highly secure and has a small number of visitors. It is used in
order to get employee information, telephone directory etc.

Intranet is the type of internet which is used by privately. It is a private

network therefore anyone can’t access intranet. In intranet, there are
limited number of users and it provides limited number of information to its
users.
 S.NOInternet Intranet

Internet is used to connect different Intranet is owned by

1. network of computers simultaneously. private firms.

In intranet, there are

2. In internet, there are multiple users. limited users.

3. Internet is unsafe. Intranet is safe.

In internet, There are more number of In intranet, There are

4. visitors. less number of visitors.

Intranet is a private
5. Internet is a public network. network.

In this, anyone can’t

6. Anyone can access Internet. access the Intranet.

Internet provides unlimited Intranet provides limited

7. information. information.

Extranet :
Extranet is owned by either a single or a many organization. It is managed
on a contractual basis between organizations and is a tool for sharing
information between the internal members and external members. Like
intranet, it is also a private network so only those who have a valid
username and password can use the extranet. Extranet is used to check
status, access data, send mail, place order etc.
 B2C B2B

Single buyer Multiple Decision Makers

Fixed consumer
Customer specific prices
prices

Direct payments Payment on credit sales

Stocks (for a.s.a.p

Smart shipments (i.e. truckloads)
shipments)

Low frequency
Reoccurring purchases
purchases

Long lasting relationship between customer and

Single visits
manufacturer

Buying because you

Buying as part of the job
like it

Buyers as part of an organization with a relationship

Consumer
defined by a contract, terms and conditions
ONLINE BUSINESS :
With the help of internet business is made possible which is given a name E
commerce it can be referred to a selling to customers electronically and
improving the way business is conducted by a company the transaction of
information goods and funds can be done through business to business,
business to consumer and consumer to consumer.
Working with E-Commerce :
Through the internet, we can easily order the goods online and the
payment of trees products you purchase can be done in various methods as
follows.
 Cash –
Pay through cash when you receive the goods at home.

 Credit cards –
The number name expiry date of the card is entered accordingly for the
transaction to be done this type of payment it is done through credit
card’s.

 Vouchers or promo code –

By paying the cash you can purchase payment coupons when some
 organization work as online buying Agencies that is e-cash this coupon
number is entered on the Purchase form and goods are delivered at your
doorstep.

Kinds of E-Commerce :
1. B2B (Business to Business) :
Between two business Enterprises, the online selling Association is
formed for selling goods to each other. In this category not only the
commercial organization come even the non-profit organizations are part
of it.
Example –
Co-operative societies, Industry associations, Chambers of commerce,
Unions, trusts, charities, NGOs, Sports clubs, etc. are the community
associations.
Typical transactions in B2B –
Typical transactions in B2B are as follows.
First For the production of goods and services that are to be sold the
purchase of raw material and components and services are done through
this. The second is the Purchase of goods for consumption. The third is
Capital equipment. And fourth is In factories & refineries, the
construction of custom-built assets is done.

2. B2G/G2B (Business to Government / Government to Business) :

It is the same as B2B only difference is other party is Government
means service delivery by govt. to enterprises.

3. B2C (Business to Consumer) :

Sale by the business Enterprise to the consumer in this case consumer is
a person or an organization consuming the goods not for commercial
benefit.

4. C2C (Consumer to Consumer) :

From one consumer to another the online selling of goods is done for
example Auctions.
Benefits of E-Commerce : /REQUIREMENTS OF E
COMMERCE/ONLINE BUSINESS

The online selling and purchasing of transactions are done through e-

commerce are the following.

 Documents including articles and books.

 Statistics including data.
 Dictionaries and encyclopedias as reference information.
 News
 Weather & Astrological forecast.
 Software
 Bank loans
 Stock based transaction
 Images and graphics such as diagrams and photographs.
 Information like Informative articles edutainment and education via
multimedia and the entertainment by a music etc.
 Speeches on musical performance are done through various sound files.
 Telephone conversation and Tele-conferencing is an interactive voice.
 Booking of online tickets for events etc.

The transactions are executed for the clients who are registered members
with the concerned authorities for bank stock etc. search registrations have
to be carried out to Electronic payments involving the purchase of a book
or a CD etc are instant and can be done through any payment modes.

What are the driving forces of electronic commerce ?

The evolution and growth of e-commerce can be attributed to a combination
of technological, marketing and economic forces.

1. E-commerce enables businesses to interact with suppliers, customers and

with players in the distribution channel at a lower cost.

2. The cost of installing and maintaining a website is much cheaper than

owning a physical store. This motivates the growth of e-commerce.

3. E-commerce generates greater profits due to less human intervention,

lower overhead cost, few clerical errors and more efficiency.

4. The cost of advertising is cheaper and provides access to global market at

low cost. This is something which encourages people engaged in business to
promote their business through electronic medium.
5. Reduction in communication cost and technological infrastructure expense
drive business towards e-business.

. Increase in competition and the rise in consumer power, ‘globalization

wave’ have forced the business organizations to penetrate into internet
world.

Technological forces that drives electronic commerce

1. Technological advances have made business communication faster,
easier, economical and efficient. It has enabled the business to switch over
from the local market to the global market.

2. The growing popularity of cyber cafes has created a big role in attracting
internet population towards e-commerce.

3. Technological changes have given confidence to consumers to make

electronic payments in settlement of financial obligations.

Market forces that drives electronic commerce

1. Business organizations are able to reach international markets by using
electronic medium for enhanced customer support and service.

2. E-commerce enables customers to make product comparison, place

orders, track orders and make payments at ease. Due to convenience,
customers prefer to purchase their desired goods or services over internet in
the online marketplace.

3. E-commerce also allows the customers to choose and order products

according to their personal and unique specifications. It paves way for mass
customization.

4. The growing internet population stimulates business to switch over from

an additional business to e-business.

5. The great variety of commodities available online and reliable payment

methods are regarded as contributors to the increase of e-business.

6. Consumers often prefer shopping on the internet due to convenience and

the changes in consumer behavior pulls consumer towards e-commerce.
Benefits of selling online

Selling online has a number of advantages over selling by traditional

methods, including:

 Making savings in set-up and operational costs. You don't need to rent
high street premises, pay shop assistants or answer a lot of pre-sales
queries.
 Reducing order processing costs - customer orders can automatically
come straight into your orders database from the website.
 Reaching a global audience, thereby increasing sales opportunities.
 Competing with larger businesses by being able to open 24 hours a
day, seven days a week.
 Being able to receive payment more quickly from online transactions.
 Improving your offerings using the data gathered by tracking customer
purchases.
 Using your online shop to showcase your products to existing
customers.
Online selling will work best if you have:

 well-defined products or services that can be sold without human

involvement in the sales process
 fixed prices for all types of potential customers
 products or services that can be delivered within a predictable lead
time
Many businesses can run pilot e-commerce sites without significant
investment. However, creating a fully automated online shop tailored to
meet your precise requirements could be expensive.

Whatever form of online shop you choose, it's important to take a strategic
view. If you launch a website that disappoints your customers or is
overwhelmed by traffic, you risk damaging your reputation and losing sales.
ONE TO ONE ENTERPRISE