Subject Name – Digital Business

Topic Name – Digital Business Ecosystem

Student Name – Kashish Shaikh

Class – First Year MBA

Division – C
Academic Year – 2022-23
Roll No - 139
Electronic commerce
• Ecommerce, also called electronic commerce or internet commerce, describes the
trading of products or services using the internet, and the transfer of cash and
data to carry out these transactions. Ecommerce is frequently utilized to describe
the sale of physical items online; however, it can likewise explain any kind of
industrial transaction that is facilitated through the internet.
• Whereas e-business refers to all aspects of running an online organization, e-
commerce refers particularly to the deal of items and services.
 Electronic commerce mechanism
• E-commerce is powered by the internet, where customers can access an online store to check out,
and place orders for products or services via their own gadgets.
• As the order is placed, the customer’s internet browser will interact back and forth with the server
hosting the online store site. Information relating to the order will then be relayed to a central
computer known as the order manager– then forwarded to databases that manage stock levels, a
merchant system that manages payment info (using applications such as PayPal, Stripe), and a
bank computer– prior to circling back to the order supervisor.
• This is to make sure that shop inventory and consumer funds suffice for the order to be processed.
After the order is confirmed, the order supervisor will notify the shop’s internet server, which will
then display a message alerting the consumer that their order has been successfully processed. The
order manager will then send out order information to the warehouse or consummation
department, in order for the services or product to be effectively dispatched to the consumer. At
this point tangible and/or digital products may be shipped to a consumer, or access to a service may
be granted.
• Platforms that host e-commerce transactions may consist of online marketplaces that sellers simply
sign up for, such as Amazon.com; software application as a service (SaaS) tools that allow
customers to ‘lease’ online shop facilities; or open-source tools for business to use in-house
advancement to manage.
 Working
Mechanism
of
Ecommerce
Online purchasing process
• The online buying process is different to the offline buying process. As an online
business owner you rarely, if at all, have any direct face-to-face contact with your
customer. A prospect finds your products online and then decides whether to
purchase or not.
• It’s important to understand a typical buying process and sales cycle, so you can
move your prospective customer from first encountering you or a particular
product, all the way through to buying your product.

There are basically 5 steps to the typical online purchasing process.

1. Identifying a problem or need
2.Researching solutions
3.Comparing solutions side by side
4.Purchasing
5.Follow-up and customer satisfaction, or a request for their money back
Identifying a problem on need
• You need to have a good understanding of your niche in the first place and most of your
marketing will be in relation to this phase. Your whole website or blog should have
content that speaks to the needs of your target audience. Take the time to learn about the
“pain points” or problems people commonly have in relation to your niche. If you know
your audience when writing content for your website you can address these issues. People
buy from businesses they know, like and trust. They don’t just want to be sold to. But they
are also busy and eager to find solutions that work. By creating this kind of helpful
content on a regular basis, you are positioning yourself as an expert in your niche worth
paying attention to.

Identifying a problem on need

• Your potential customer has realized they have a problem and that there may be
solutions out there for them if they could just find them. They will be
researching the various options available to them to solve their problem. Your
website will show that you understand the main problems in your niche, and
offer viable solutions at the right price.
• This stage can take some time in the buyer’s journey. Some people research their
options for months or even years before deciding. How expensive or life-altering
the choice is, will influence how long it takes. As long as you continue to offer
content that fits in with your goal to help them solve their problem, it will be
easier to transform them from leads to customers.
Comparing solutions side by side
• At this point, your prospective customer should be getting to the narrowing down process.
Side-by-side comparisons with similar products, but which show the value that you offer,
can sway their decision in your favor. Table, charts, diagrams, features and
benefits, testimonials and reviews, are just the types of content they will be looking for.

purchasing
• When a customer buys from you, be sure the online buying process carries forward
on the page into a receipt they can keep. Also send an email thanking them for their
purchase. Segment them onto a customer list for that product so you can support
them with any customer service issues and personalize your email marketing to them
by putting the right offers in front of them, not offers for items they’ve already
bought.
Follow-Up and Customer Satisfaction, or a Request
for Their Money Back
• Putting them on a customer list for a particular product can put you in direct
communication with them in case they have any questions or problems. You can
also add real value with hints and tips, a quick-start guide to using the product,
and so on. These little surprise gifts and bonuses don’t cost much in terms of
time and effort, but they can have a huge impact in terms of customer
satisfaction and their perception of your business.
E-Marketplace
• On the other hand, an e-marketplace is an online platform that connects buyers
and sellers, allowing third-party sellers to market and sell their products on the
platform and invoice the customer for a purchase directly. It is a segment of e-
commerce in which the marketplace owner does not own the inventory or invoice
the customer for a purchase. Rather, the e-marketplace serves to present other
sellers’ inventory to a consumer and facilitate a transaction.
• Amazon and eBay were among the first e-marketplaces, birthed in the mid-1990s
when the internet was gaining mainstream traction. In today’s digital-first world,
e-marketplaces are disrupting the e-commerce landscape, with Amazon at the
forefront. Amazon and Walmart, specifically, are examples of hybrid e-
marketplaces, as they offer their own products and products of other brands and
third-party sellers
Need of Electronic Marketplace
• E-commerce and e-business are not solely the Internet, websites or dot com
companies. It is about a new business concept that incorporates all previous
business management and economic concepts. As such, e-business and e-
commerce impact on many areas of business and disciplines of business
management studies:

1. Marketing: Issues of online advertising, marketing strategies, consumer‟s

behavior and cultures. One of the areas in which it impacts particularly is direct
marketing. In the past this was mainly door-to-door, home parties and mail
order using catalogues or leaflets. This moved to telemarketing and TV selling
with the advances in telephone and television technology and finally developed
into e-marketing spawning „e-CRM‟ data mining and the like by creating new
channels for direct sales and promotion.
2. Computer Sciences: Development of different network and computing
technologies and languages to support e-commerce and e-business, for example
linking front and back office legacy systems with the „web based‟ technology.
3. Finance and Accounting: On-line banking; issues of transaction costs; accounting and
auditing implications where „intangible‟ assets and human capital must be tangibly valued
in an increasingly knowledge based economy.
4. Economics: The impact of e-commerce on local and global economies, understanding the
concept of a digital and knowledge-based economy and how this fits into economic theory.
5. Production and Operations Management: The impact of on-line processing has led
to reduced cycle times. It takes seconds to deliver digitized products and services
electronically; similarly the time for processing orders can be reduced by more than 90 per
cent from days to minutes. Production systems are integrated with finance marketing and
other functional systems as well as with business partners and customers.
6. Production and Operations Management: Moving from mass production to
demand driven, mass customization customer pull rather than the manufacturer push of the
past. Web based Enterprise Resource Planning systems (ERP) can also be used to forward
orders directly to designers and/or production floor within seconds, thus cutting production
cycle times by up to 50 per cent, especially when manufacturing plants, engineers and
designers are located in different countries. In sub-assembler companies, where a product is
assembled from a number of different components sourced from a number of
manufacturers, communication, collaboration and coordination are critical so electronic
bidding can yield cheaper components and having flexible and adaptable procurement
systems allows fast changes at a minimum cost so inventories can be minimized and money
saved.
7. Management Information Systems: Analysis, design and implementation of
E-business systems within an organization; issues of integration of front-end and
back-end systems.
8. Human Resource Management: Issues of on-line recruiting, home working
and „intra- pruners‟ working on a project by project basis replacing permanent
employees.
9. Business Law and Ethics: The different legal and ethical issues that have
arisen as a result of a global „virtual‟ market. Issues are copyright laws, privacy of
customer information, and legality of electronic contracts.
Different types of Electronic Marketplace
• E-marketplaces connect buyers and sellers together on a single platform for
commercial activity. When you talk about marketplaces, you definitely hear terms
like B2C, B2B, C2C or peer-to-peer. So, what are they and how they differ from
each other?
• The way how they are connected and how the services or products are being sold
on the platform categories the marketplace into different types. These
marketplaces are also often defined under the term multi-vendor marketplace
and sharing economy platforms. Here are some marketplace basics to help you
decide what kind of multi-vendor store is the right business model for you.
• There are 5 different types of E Marketplace
Product online Marketplace
• This type is what we typically call as an ecommerce marketplace, where
people buy and sell products. The platform brings together all types of
sellers into a one-stop-shop that is convenient for consumers to not only
check prices for the best deals but do so all under one electronic roof. Also,
with features like auction and fixed price sale, the seller lists a product and
sets a deadline; buyer with the highest bid gets the item.
• Usually, this type of marketplace is owned by an operator who enables
third-party sellers to sell products alongside the marketplace owner's
regular offerings. Examples include Amazon, Flipkart, eBay, etc. Here, the
vendor business model plays a major role that determines the profit for
marketplace owners. Hence, it is wise to choose the right multi-vendor
software that has a flexible model and suits your requirements.
Online service Marketplace
• The online marketplace is no longer restricted to just selling products. You
can even cater to the service industry. For a startup business that wants to
launch a marketplace with minimal input, it is good to offer different
services that people search for.
• In a services marketplace, the discovery of services forms the basis of its
offering to customers and opportunities for paid work form the basis of its
offering to freelancers. Platforms like Fiverr, Upwork are freelance services
marketplaces.
• With the service business, all you have to do is to offer a robust & reliable
online platform to connect service seekers with service providers. The
platform acts as a bridge connecting both these ends. You can earn a
commission on each successful transaction.
Hybrid model in ecommerce
• There can be two types of hybrid online marketplaces. One category is
where people expect to sell and buy both services and products on the
same platform. The online marketplace like Olx fits into this category.
• Another one is where people want to get the combined benefits of buying
from the online and offline stores. In this model, the customer first books
the products online. After that, they walk down to the nearby physical
store to buy those products. Currently, ticket booking websites like
BookMyShow works based on this model.
• As per the latest update, big retailers like Reliance Trends and Myntra
foray into the ecommerce segment with a hybrid online-offline model. This
model creates shared profitability by integrating offline stores via the
online platform. As such you can launch hybrid online marketplaces to
bring local merchants to sell their products through its website.
 Customer shopping mechanism
• Several kinds of interactions exist among sellers, buyers, and e-marketplaces.
Themajor B2C mechanisms are webstores(storefronts) and Internet malls.

Webstores:
1. A webstore (or storefront) refers to a single company’s (or individual seller’s)
website where products and services are sold.
2. Includes tools known as
3. Merchant software (available in a suite), that are necessary for conducting
online sales. The most common tools are an electronic catalog;
4. A search engine that helps the consumer find products in thecatalog;
5. An electronic shopping cart forholding items until checkout;
6. E-auction facilities where auctions take place;
7. A payment gateway where payment arrangements can be made;
8. a shipment center where shipping arrangements are made; and customer
services, which include product and warranty information and CRM
• Electronic Malls:
In addition to shopping at individual webstores, consumers can shop in electronic
malls (e-malls). Similar to malls in the physical world, an e-mall (online mall) is an
online shopping location where many stores present their catalogs. The mall charges
commission from the sellers based on their sale volume.
• Web (Information) Portals
A portal is an information gateway that is used in e-marketplaces, webstores, and other
types of EC (e.g., in e-collaboration, intra business, and e-learning). A
Web(information) portal is a single point of access, through a Web browser, to critical
business information located inside and outside of organizations
• Types of Portals
1. Commercial (Public) Portals
2. Corporate (Private) Portals
3. Publishing Portals
4. Mobile Portals
5. Voice Portals
6. Knowledge Portals
7. Communities Portals
Supply chain
• A supply chain is an entire system of
producing and delivering a product or
service, from the very beginning stage of
sourcing the raw materials to the final
delivery of the product or service to end-
users. The supply chain lays out all
aspects of the production process,
including the activities involved at each
stage, information that is being
communicated, natural resources that
are transformed into useful materials,
human resources, and other components
that go into the finished product or
service.
 Supply chain for an
e-commerce company
• The e-commerce company operates a website, and that
website sells various products. When a customer places an
order for a product, the product order is being processed by
technology such as a checkout cart, an order system, or a
third-party product such as Shopify. The payment processors
then come in and deal with payment transactions for the
order, which actually opens up a new supply chain.
• The payment processors use their own systems but, in most
cases, third parties such as PayPal and Stripe are employed,
and they involve banks and other providers. When a product
order is placed, the warehouse receives the order and
ensures the product is ready for delivery. The warehousing
company can be either in-house or a third-party logistics
provider.
• The order then goes from the warehouse to the shipping
company. Once again, the shipping may be in-house or a
third-party shipping company. After shipping, the package
arrives at the customer’s door and the customer receives it.
Thank You