E - Commerce - Unit 1

E- Commerce:
Meaning and Terminology

By:-
Dr. Vani Kapoor Nijhawan
Assistant Professor, VIPS
Commerce: Definition & Meaning
 According to Wikipedia:
“It is exchange of goods and services, specially on a large scale.”
 According to Investopedia:
“Commerce is the conduct of trade among economic agents. ”
 Putting it together:
“Commerce or Trade is the exchange of goods and/or services between two parties (persons or
entities), usually, on a regular basis or on a large scale, in exchange of money.”

E- Commerce
 E-commerce describes any business or commercial transaction that includes the transfer
of financial information over the Internet. It gained the popularity in 21st century.
 “Electronic Commerce is a general concept covering any form of business transactions or
information exchange executed using information and communication technology,
between companies, between companies and their customers, or between companies
and public administrations."
 Electronic Commerce includes trading of goods, services, electronically.
 It aims to cut cost while improving the quality of goods and services and increasing the
speed of service delivery using Internet.

E- Commerce Activities
 Buying and selling product online

 Online ticketing
 Online Payment
 Paying different taxes
 Online accounting software
 Online customer support

E-Business
Ref: Geeks for Geeks
 E-Business refers to performing all type of business activities through internet. It includes activities like
procurement of raw materials/goods, customer education, supply activities buying and selling product,
making monetary transactions etc. over internet. Internet, intranet, extranet are used in e-business.
Websites, apps, ERP, CRM etc. are required for e-business.
 Activities of E-Commerce are :
• Online store setup
• Customer education
• Buying and selling product
• Monetary business transaction
• Supply Chain Management
• E-mail marketing

Difference between E-Commerce and E-
Business : Ref: Geeks for Geeks
S.No. E-COMMERCE E-BUSINESS
E-Commerce refers to the performing online E-Business refers to performing all type of
01.
commercial activities, transactions over internet. business activities through internet.
E-Commerce is a narrow concept and it is E-Business is a broad concept and it is

02.
considered as a subset of E-Business. considered as a superset of E-Commerce.
Commercial transactions are carried out in e- Business transactions are carried out in e-
03.
commerce. business.
04. In e-commerce transactions are limited. In e-business transactions are not limited.

Difference between E-Commerce and E-
Business : Ref: Geeks for Geeks
It includes activities like procurement of raw
It includes activities like buying and materials/goods, customer education,
05. selling product, making monetary supply activities buying and selling product,
transactions etc over internet. making monetary transactions etc over
internet.
It requires the use of multiple websites,

It usually requires the use of only a
06. CRMs, ERPs that connect different business
website.
processes.
It involves the use of internet, intranet or
07. It involves mandatory use of internet.
extranet.
E-commerce is more appropriate in E-business is more appropriate in Business to
08.
Business to Customer (B2C) context. Business (B2B) context.
E-Commerce covers outward/external E-Business covers internal as well as external

09.
business process. business process/activities.

E-Business Goals
Goals organizations keep in mind while doing E-business

 Reach New Markets
 Create new products or services
 Build customer loyalty
 Enrich human capital
 Make the best use of existing and emerging technologies
 Achieve market leadership and competitive advantage.
 E.g. SAP

Relationship: E–Commerce & E-
Business
E –Business
E - Commerce

Advantages of E-Commerce to Customers
 Low Cost:- Costs of products are reduced since the stages along the value chain
are decreased. For instance, intermediaries can be eliminated by the company
directly selling to the customers instead of distributing through a retail store.
 24-Hour Access:- E-Commerce allows people to carry out businesses without the
barriers of time.
 Global Market:- Consumers can shop from anywhere in the world. This also
provides wide selection of products and services to consumers.
 Unlimited Choices:- Provides consumers with more choices. For e.g. before
making any purchase, customer can study about all the major brands and
features of any item. It also provides consumers with less expensive products and
services by allowing them to shop in many places.

Advantages of E-Commerce to
Businesses
 Higher potential market share:- The internet enables businesses to have access
to international markets thereby increasing their market share. Companies can
also achieve greater economies of scale.
 Low Advertising Cost:- Advertising on the internet costs less than advertising on
print or television depending on the extent of advertisements. Advertising on the
internet itself is less costly since there is less cost associated with it in terms of
printing and limited television spots.
 Low barriers to Entries:- Anyone can start up a company on the internet. Start-
up costs are a lot lower for companies since there is less need for money for
capital.
 Strategic Benefits:- The Strategic benefits of making a business e-commerce
enabled is that it helps reduce the delivery time, labour cost and the cost
incurred in document preparation, data entry, error detection etc.

Disadvantages of E-Commerce
 Hidden Costs:- Although buying online is convenient, the cost of this

convenience is not always clear at the front end. For e.g. on-line
purchases are often accompanied by high shipping and re-stocking fees, a
lack of warranty coverage and unacceptable delivery times.
In fact, too many e-commerce companies have developed a reputation
of overcharging for shipping and handling.
 Lack of Security:- One of the main roadblocks to the wide acceptance of
e-commerce by businesses and consumers alike is the perceived lack of
adequate security for on-line transactions.
For e.g. Consumers are growing increasingly worried about providing
credit card information over the Internet.

 Lack of Privacy:- Customers also worry about the privacy implications of
data gathered by organizations of all types and sizes.
➢ Information is stored in databases connected to web servers, thus
exposing the information to cyber criminals. Databases routinely
contain information about customer purchasing habits, credit
information and so on.
➢ In many cases, companies sell customer database information to
marketing companies. In turn, the marketing companies engage in
massive e-mail campaigns to attract new customers resulting in
unwanted email (also known as Spam).

 Network Unreliability:- Although the Internet is designed to overcome the

single point of failure problem, there have been several well-publicized
incidents of network failures during the past few years. Network reliability
problems may be generated by such factors as:-
➢ Equipment failure in the network connection provider.
➢ Accidental problems caused by nature-such as lightning, floods,
earthquakes that affect communication lines.
➢ Long response time due to increased network traffic or inadequate
bandwidth.

 Low Service Levels:- Another common complaint about doing business

online is the low level of customer service that online companies tend to
provide. Although technology has automated business transactions to a
large extent, there remains a real need for the human touch. Therefore e-
commerce websites must provide:-
➢ A pleasant and problem free pre-ordering and ordering experience.
The website design is an important interface.
➢ Readily available easily used feedback options.
➢ Quick complaint resolution.
➢ Timely and low-cost shipping delivery to customers.

Electronic Markets
 An Electronic Market is where we make use of information and

communications technology, to showcase a range of offerings
available in a market segment so that the buyer can compare the
prices and/or other features of the offerings to make a purchase
decision. Example: Airline Ticket Buying, Buying books from
Amazon.

Internet Commerce
 Internet commerce is the trading done using internet enabled

devices i.e shopping through any Websites on any device or using
the Mobile Apps, etc.
 Electronic Commerce is trading using any electronic gadget like
shopping through Telephone, TV Shopping, etc.

Electronic data interchange
 Electronic data interchange (EDI) is the process used by

organizations in order to transmit the data between organizations
by electronic means. It is used to transfer electronic documents or
business data from one computer system to another computer
system, i.e. from one trading partner to another trading partner
without human intervention.

Electronic data interchange
EDI provides a standardized system for coding trade transactions so that they can be
communicated directly from one computer system to another without the need for printed
orders and invoices and the delays and errors implicit in paper handling. EDI is used by
organizations that make a large number of regular transactions. One sector where EDI is
extensively used is the large supermarket chains which use EDI for transactions with their
suppliers.
https://www.youtube.com/watch?v=ynVbAo7oaxM

Key aspects of EDI
1. Standardized Formats:
EDI uses standardized formats for representing business documents, such as ASC X12 in North
America and EDIFACT internationally. These formats define the structure and content of each type
of document to ensure consistency and interoperability.
2. Data Transmission:
EDI enables the electronic transmission of data between trading partners over secure
communication channels. Common protocols used for this purpose include AS2 (Applicability
Statement 2), FTP (File Transfer Protocol), and secure VANs (Value-Added Networks).
3. Document Exchange:
Common business documents exchanged through EDI include purchase orders, invoices, shipping
notices, and various types of confirmations. Each document type has a specific format and set of
data elements.

Key aspects of EDI
4. Automation and Efficiency:

EDI helps automate the exchange of business documents, reducing the need for manual data entry
and paper-based processes. This automation leads to increased efficiency, faster transaction
processing, and reduced errors.
5. Integration with Business Systems:
EDI systems are often integrated with internal business systems, such as Enterprise Resource
Planning (ERP) and supply chain management software. This integration ensures seamless data flow
between different departments and partners.
6. Compliance and Industry Standards:
Different industries may have specific EDI standards and requirements. Compliance with these
standards ensures that trading partners can exchange information smoothly. For example, the
healthcare industry often uses the HIPAA EDI standard.

Key aspects of EDI
1. Security Measures:
Given the sensitive nature of business data being exchanged, EDI systems implement various
security measures, including encryption, authentication, and access controls, to protect information
during transmission.
2. Trading Partner Agreements:
Successful EDI implementation often involves establishing trading partner agreements, where
organizations agree on the specific EDI standards, protocols, and procedures they will use for
electronic communication.
EDI has been widely adopted across industries to improve communication efficiency, reduce
costs, and enhance accuracy in business transactions. It plays a crucial role in supply chain
management, logistics, and various other business processes where the timely and accurate
exchange of information is essential.

EDI Process: Steps
 Step 1: Prepare the documents to be sent

 The first step is to collect and organize the data. For example, instead of printing a
purchase order, your system creates an electronic file with the necessary
information to build an EDI document. The sources of data and the methods
available to generate the electronic documents can include:
• Human data entry via screens
• Exporting PC-based data from spreadsheets or databases
• Reformatted electronic reports into data files
• Enhancing existing applications to automatically create output files that are ready
for translation into an EDI standard
• Purchasing application software that has built-in interfaces for EDI files

EDI Process: Steps
 Step 2: Translate the documents into EDI format

 The next step is to feed your electronic data through translator software to convert
your internal data format into the EDI standard format using the appropriate
segments and data elements. You can purchase EDI translation software that you
manage and maintain on your premises. This requires specialized mapping
expertise in order to define how your internal data is to be mapped (i.e. correlated)
to the EDI data. Translation software is available to suit just about any computing
environment and budget, from large systems that handle thousands of transactions
daily to PC-based software that need only process a few hundred transactions per
week.
 Alternatively, you can use the translation services of an EDI service provider. In
that case, you send your data to the provider, who handles translation to and from
the EDI format on your behalf.

EDI Process: Steps
 Step 3: Connect and Transmit your EDI documents to your business partner
 Once your business documents are translated to the appropriate EDI format they
are ready to be transmitted to your business partner. You must decide how you will
connect to each of your partners to perform that transmission. There are several
ways, the most common of which include 1) to connect directly using AS2 or
another secure internet protocol, 2) connect to an EDI Network provider (also
referred to as a VAN provider) using your preferred communications protocol and
rely on the network provider to connect to your business partners using whatever
communications protocol your partners prefer, or 3) a combination of both,
depending on the particular partner and the volume of transactions you expect to
exchange. Our types of EDI page goes into detail of the various options of EDI a
business can implement.

EDI Process

E–Commerce Categories
Electronic
Markets
EDI Internet
Commerce

Types of E-Commerce/ E-Commerce
Market Models
There are five types of E-Commerce:-

✓ Business To Business (B2B)
✓ Business To Consumer (B2C)
✓ Consumer To Business (C2B)
✓ Consumer To Consumer (C2C)
✓ Business To Government (B2G)
✓ Government To Consumer (G2C)

Market Models
 Business To Business (B2B):- Business to Business or B2B refers to e-commerce activities
between businesses. An E-Commerce company can be dealing with suppliers or
distributers or agents. These transactions are usually carried out through Electronic Data
Interchange (EDI).
 For e.g. manufacturers and wholesalers are B2B Companies.
 By processing payments electronically, companies are able to lower the number of clerical
errors and increase the speed of processing invoices, which result in lowered transaction
fees.
 In general, B2Bs require higher security needs than B2Cs.
 With the help of B2B E-commerce, companies are able to improve the efficiency of several
common business functions, including supplier management, inventory management and
payment management.
 It can be buyer-centric, supplier-centric or an Intermediary-centric.
 Example: Indiamart.com
Market Models
 Business To Customer (B2C):- Business to Customer or B2C refers to E-Commerce
activities that are focused on consumers rather than on businesses.
 For instance, a book retailer would be a B2C company such as Amazon.com. Other
examples could also be purchasing services from an insurance company, conducting on-
line banking and employing travel services.

Market Models
 Customer To Business (C2B):- Customer to Business or C2B refers to E-Commerce
activities which use reverse pricing models where the customer determines the prices of
the product or services.
 In this case, the focus shifts from selling to buying. There is an increased emphasis on
customer empowerment.
 In this type of E-Commerce, consumers get a choice of a wide variety of commodities and
services, along with the opportunity to specify the range of prices they can afford or are
willing to pay for a particular item, service or commodity.
 Increases flexibility and ease both consumer and merchant.
 Example: Job portals: Naukri.com, timesjob.com

Market Models
Customer To Customer (C2C):- Customer to Customer or C2C refers to E-commerce activities,
in which the model consists of a person-to-person transaction that completely excludes
businesses from the equation.
 Customers are also a part of the business and C2C enables customers to directly deal with
each other.
 It promotes the opportunity for consumer to transact goods or services with other
consumers present on the internet.
 The customer operates by the rules of this community to compete, check and decide his
own basic selling and/or buying prices.
 Example: OLX

Market Models
 Business To Government (B2G):- It is a new trend in E-Commerce. The sale and marketing
of goods and services to government agencies.
 It refers to the use of internet for public procurement, licensing procedures and other
government related operations
 E.g. Business pay taxes, file reports
 This also saves time of the employees as well as the citizens.

Market Models
 Government To Consumer (G2C):- In these types of e- commerce activities, the
government deals with direct consumers for various types of goods/ services.
 The electronic commerce activities performed between the government and its citizens
or consumers
 Example:- Driving License, Passport

Evolution of E commerce (Key Drivers)
The evolution of e-commerce has been a fascinating journey, transforming the way businesses
operate and consumers shop. Here is a broad overview of the key stages in the evolution of e-
commerce:
1.Early Online Transactions (1970s-1990s):
•The origins of e-commerce can be traced back to electronic data interchange (EDI) in the
1970s and 1980s when businesses started exchanging data electronically.
•The first online transactions were conducted in the 1990s with the emergence of the
internet and the World Wide Web.
2.Rise of Online Retailers (1990s-2000s):
•The 1990s saw the rise of online marketplaces and retailers, such as Amazon and eBay,
which provided a platform for buying and selling goods online.
•Secure online payment systems and advancements in technology, including SSL
encryption, boosted consumer confidence in online transactions.

3.Dot-com Boom and Bust (late 1990s):
•The late 1990s saw a rapid increase in the number of e-commerce startups during the
dot-com boom.
•However, many of these companies faced financial challenges, leading to the dot-com
bust in the early 2000s.
4.Mobile Commerce (2000s-2010s):
•The widespread adoption of smartphones in the 2000s led to the growth of mobile
commerce (m-commerce), allowing users to make purchases using their mobile devices.
•Mobile apps and optimized websites for mobile platforms became essential for online
retailers.
5.Social Commerce (2010s):
•Social media platforms, such as Facebook, Instagram, and Pinterest, became important
for e-commerce as they provided new avenues for marketing and selling products.
•Social commerce integrated shopping features directly into social media platforms.
6.Omnichannel Retail (2010s-2020s):
•The focus shifted to providing a seamless shopping experience across multiple
channels, including online, mobile, and brick-and-mortar stores.
•Retailers integrated inventory management systems to synchronize product availability
across different platforms.
7.Artificial Intelligence and Personalization (2010s-2020s):
•AI and machine learning have been applied to e-commerce for personalized
recommendations, chatbots, and improving the overall customer experience.
•Predictive analytics help businesses understand consumer behavior and tailor
marketing strategies.
8.Blockchain and Cryptocurrency (2010s-2020s):
•Blockchain technology has been explored for enhancing security in e-commerce
transactions, ensuring transparency, and reducing fraud.
•Some e-commerce platforms have started accepting cryptocurrencies as a form of
payment.
9.Augmented Reality (AR) and Virtual Reality (VR):
•AR and VR technologies are being integrated into the e-commerce experience, allowing
customers to visualize products before purchasing.
•Virtual try-on experiences and interactive product demonstrations are becoming more
common.
10.E-commerce during the COVID-19 Pandemic (2020s):
•The global pandemic accelerated the shift towards online shopping, with e-commerce
becoming a crucial lifeline for businesses and consumers during lockdowns and
restrictions.
The evolution of e-commerce continues as technology advances, consumer behavior evolves,

and new innovations emerge. Trends such as voice commerce, drone deliveries, and further
advancements in AI are likely to shape the future of e-commerce.

Trade Cycle
 A "trade cycle" refers to the fluctuations in the business activities or a series of stages in
the economy as it expands and contracts.
 Conducting a commercial transaction involves the following steps:
 Pre-Sale:
➢ Search - finding a supplier
➢ Negotiate – agreeing the terms of trade
 Execution:
➢ Order
➢ Delivery
 Settlement:
➢ Invoice
➢ Payment
 After-sales, e.g. warrantee and service

Trade Cycle
 The trade cycle varies depending on:-
➢ The nature of the organization (or individuals) involved.
➢ The nature and type of goods or services being exchanged.
➢ The frequency of trade between the partners to the exchange process.
 There can be 3 generic trade cycles which can be identified:
➢ Regular, repeat transactions between commercial trading partners
(Repeat)
➢ Irregular transactions between commercial trading partners where
execution and settlement are separated (Credit)
➢ Irregular transactions in once-off trading relationships where execution
and settlement are typically combined (Cash)

Generic Trade Cycles
Trade Cycle: Repeat Credit Cash
Search
Pre-Sale
Negotiate
Order
Execution
Deliver
Invoice
Settlement
Payment
After Sales After Sale

Electronic Markets & Trade Cycles
 Emphasis on the search phase of the trade cycle

 Typically an inter-organizational credit trade cycle
Search
Pre-Sale
Negotiate
EM
Order
Execution
Deliver
Invoice
Settlement
Payment

Electronic Data Interchange & Trade
Cycle
 Used for standardised, repeat, inter-organisational transactions.
Search
Pre-Sale
Negotiate
Order
Execution
Deliver EDI
Invoice
Settlement
Payment
 Popular users of EDI are vehicle assemblers, component supplier’s, and supermarkets
(and other multiple retailers), ordering the goods to restock their shelves.
Internet commerce & Trade Cycle
 Used for once-off transactions – consumer or inter-organisational transactions.
 Can apply to Search, Execution / Settlement and / or After Sales.
 Consumers pay at time of ordering – businesses may have credit arrangements with the
suppliers.
Search
Pre-Sale
Negotiate
Order
Execution
Deliver Internet
Invoice
Settlement
Payment

E-Commerce vs Traditional Commerce
 In E- Commerce sale and purchase of goods or services is by electronic means, particularly

over the internet and via electronic means. Example:- Accessing a cyber bookstore and
download a digital book from a server computer.
 In a physical or traditional commerce system, transactions take place via contact between
humans usually in a physical outlet such as a bookstore.
 E-Commerce is more suitable for standard goods, intangible goods; whereas traditional
commerce is more suitable for non standard goods, perishable goods, and expensive
goods.
 Complex products such as cars or other gadgets are better served by integrating e-
commerce and physical commerce.

E-Commerce vs Traditional Commerce
S. No. Traditional Commerce E- Commerce
Customers can authenticate a merchant. No fixing of responsibility
So has the fix responsibility.
Customers can talk to merchant directly. Customers only see the representation.
Communication pages are not in third
party’s hands
Customers can interact with other Customers can not interact with others
customers for merchant feedback. but may read the reviews.
It has fixed timings It is available 24*7*365

Slow method Fast Method
Cash deals can be done, so no need to Personal information needs to be
share personal information shared
Functions of E-Commerce
 Marketing:- it is a way of direct marketing. Previously, marketing was done door-to-door,

in home parties (like the Tupperware parties) and mail orders using catalogues or leaflets.
This moved to telemarketing and TV selling with the advance in television technology and
finally developed into e-marketing.
 Human Resource Management:- Issues of on-line recruiting, work from home and
‘entrepreneurs’ working on a project by project basis replacing permanent employees.
 Business law and ethics:- The different legal and ethical issues that have arisen as a result
of a global ‘virtual’ market. Issues such as copyright laws, privacy of customer information
etc.
 Management Information System:- Analysis, design and implementation of e-business
systems within an organization ; issues of integration of front-end and back-end systems.

Functions of E-Commerce
 Product Operations and Management:- The impact of on-line processing has led to
reduced cycle time. It takes seconds to deliver digitized products and services
electronically; similarly the time for processing orders can be reduced by more than 90
percent from days to minutes.
 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 increasing knowledge based economy.
 Economy:- The impact of E-commerce on local and global economies; understanding the
concepts of a digital and knowledge based economy and how this fits into economic
theory.

E-Commerce Applications
E-Marketing & E-Advertising:-
 It is consider to be broad in scope because not refers to marketing on the internet but also
done in Email and wireless media.
 E-Marketing ties together the creative and technical aspects of the internet, including
design development, advertising like social networking advertisements and sales.
 Internet marketing is associated with several business models i.e., B2C, B2B, C2C.
 Internet marketing is inexpensive when examine the ratio of cost to the reach of the
target.

E-Banking:-
 Means any user with a personal computer and browser can get connected
to his banks, website to perform any of the banking functions. In internet
banking system the bank has a centralized data base i.e., web-enabled.
Example for E-Banking is ATM and other services include:
➢ Bill Payment Service
➢ Fund Transfer
➢ Investing through Internet Banking
➢ Shopping

E-Learning:-
 E-Learning comprises all forms of electronically supported learning and
teaching.
 E-Learning applications and processes include web-based learning, computer-
based learning.
 Content is delivered via. The internet, intranet/extranet, audio, or video tape,
satellite TV.
 E-Learning is naturally suited to distance and flexible learning, but can also be
used conjunction with face-to-face teaching.
 E-Learning can also refer to the educational website such as those offering
learning scenarios worst and interactive exercises for children.
 A learning management system (LMS) is software used for delivering, tracking,
and managing training /education

Mobile Commerce:-
 Mobile Commerce also known as M-Commerce, is the ability to
conduct, commerce as a mobile device, such as mobile phone.
 Banks and other financial institutions use mobile commerce to allow
their customers to access account information and make transactions,
such as purchasing, withdrawals etc.,
 Using a mobile browser customers can shop online without having to
be at their personal computer.

 SERVICES ARE:
1. Mobile ticketing
2. Purchase of the ring tones, wallpapers and games of mobile phones.
3. Local base services
• Local discount offers
• Local weather
4. Information services
• News
• Sports, Scores

Online Shopping:-
 Online shopping is the process whereby consumers directly buy goods or services from a sell in
real time, without intermediary services over the internet.
 An online shop, e-shop, e-store, internet shop web shop, web store, online store, or virtual
shop evokes the physical analogy of buying products or services in a shopping center.
 In order to shop online, one must be able to have access to a computer, a bank account and
debit card.
 Online shoppers commonly use credit card to make payments, however some systems enable
users to create accounts and pay by alternative means, such as
• Cheque.
• Debit cards.
• Gift cards
 Online stores are usually available 24 hours a day

Entertainment:-
 The conventional media that have been used for entertainment are
1. Books/magazines.
2. Radio.
3. Television/films.
4. Video games.
 Online books /newspapers, online radio, online television, online firms, and online games
are common place in internet where we can entertain.
 Online social networking websites are one of the biggest sources of E-entertainment for
today’s tech-savvy generation.

Electronic Auction
 An e-auction is a transaction between sellers (the auctioneers) and bidders (suppliers in
business to business scenarios) that takes place on an electronic marketplace. It can occur
business to business, business to consumer, or consumer to consumer, and allows
suppliers to bid online against each other for contracts against a published specification.
 Example: MSTC (types of wood, coal,etc.), ibapi (property- residential, commercial), ebay,
etc.

Unique Features of E commerce /
Benefits
1. Global Reach:
E-commerce allows businesses to reach a global audience without the need for physical storefronts in
multiple locations. This enables companies to expand their customer base beyond geographical
boundaries.
2. 24/7 Availability:
Online stores are accessible 24/7, providing customers with the flexibility to shop at any time that suits
them. This constant availability is a significant advantage over traditional retail stores with fixed operating
hours.
3. Convenience and Accessibility:
E-commerce offers unparalleled convenience, allowing customers to browse, compare, and purchase
products from the comfort of their homes using various devices such as computers, smartphones, and
tablets.
4. Personalization:
E-commerce platforms leverage data analytics and artificial intelligence to provide personalized shopping
experiences. Recommendations, personalized offers, and targeted marketing efforts enhance customer
engagement and satisfaction.
5. Diverse Payment Options:
Online transactions support a variety of payment methods, including credit cards, digital wallets,
bank transfers, and even cryptocurrencies. This flexibility caters to diverse customer preferences and
enhances the overall shopping experience.
6. User Reviews and Ratings:
E-commerce platforms often feature customer reviews and ratings for products. This user-generated
content helps potential buyers make informed decisions and builds trust in the online shopping
process.
7. Data Collection and Analysis:
E-commerce allows businesses to collect and analyze vast amounts of customer data. This
information is valuable for understanding consumer behavior, preferences, and trends, enabling
businesses to make data-driven decisions.

8. Supply Chain Integration:
E-commerce systems can be integrated with supply chain management software to streamline
processes such as inventory management, order fulfillment, and shipping. This integration enhances
efficiency and reduces operational costs.
9. Instant Transactions:
E-commerce facilitates quick and secure transactions. Digital payment methods and online
checkouts enable customers to complete purchases rapidly, contributing to a seamless shopping
experience.
10. Dynamic Pricing:
E-commerce platforms can implement dynamic pricing strategies, adjusting prices based on factors
such as demand, supply, and customer behavior. This flexibility allows businesses to optimize
revenue and remain competitive.

11. Cross-Selling and Up-Selling:
E-commerce sites employ techniques like cross-selling and up-selling to encourage customers to purchase
additional items or upgrade their selections. This can be achieved through product recommendations or
bundled offers.
12. Mobile Commerce (m-commerce):
With the prevalence of smartphones, e-commerce has expanded into mobile commerce. Dedicated mobile
apps and responsive websites ensure a seamless shopping experience for users on various mobile devices.
13. Security Measures:
E-commerce platforms implement robust security measures, including encryption protocols and secure
payment gateways, to protect sensitive customer information and build trust in online transactions.
These features collectively contribute to the success and growth of e-commerce, making it a
dynamic and influential component of the modern retail landscape.

Issues and Challenges in E - Commerce
 Technical issues
 Perceptual issues (awareness)
 Societal issues
 Legal and ethical issues
 Intellectual property issues

 Interoperability -The ability of systems running in different operating environments to
communicate and work together.– E.g., clients running Windows can access Web pages
from servers running Linux or Mac.
 Security -Three types of security threats
➢ denial of service
➢ unauthorized access, and
➢ theft and fraud
 Privacy
 Web organization – how to conveniently locate products or services on-line from a dozen
of “directories” on the Web.

M - Commerce
 M-commerce, short for mobile commerce, refers to the buying and selling of goods and services through
mobile devices such as smartphones and tablets. It involves online transactions conducted using mobile
devices and is an extension of e-commerce (electronic commerce) that originally started with transactions
conducted on the internet via desktop computers.
 Key features of M-commerce include:
1. Mobile Apps: Many businesses have developed dedicated mobile applications to facilitate easy and
convenient transactions. These apps often provide a streamlined and user-friendly interface for customers
to browse products, make purchases, and manage their accounts.
2. Mobile Websites: In addition to apps, businesses also optimize their websites for mobile viewing, ensuring
that users can easily navigate and make purchases using their mobile browsers.
3. Mobile Payments: M-commerce relies heavily on mobile payment methods. This includes various forms of
digital payment, such as credit/debit card transactions, mobile wallets, and other electronic payment
options. Mobile payment systems like Apple Pay, Google Pay, and Samsung Pay are examples of technologies
that enable secure mobile transactions.

M - Commerce
4. Location-based Services: M-commerce often leverages the capabilities of mobile devices, including location-
based services. Businesses can use location data to provide personalized offers, discounts, or information
based on the user's current location.
5. Mobile Banking: Mobile devices are commonly used for banking services, allowing users to check account
balances, transfer funds, and even apply for loans or credit cards through mobile apps.
6. Mobile Marketing: M-commerce also involves mobile marketing strategies to reach and engage with
customers. This can include targeted advertisements, promotions, and push notifications delivered through
mobile devices.
7. Mobile Ticketing and Vouchers: Events, transportation services, and various businesses offer mobile
ticketing and voucher systems. Customers can purchase tickets or vouchers through their mobile devices
and use them for access or discounts.
M-commerce has become increasingly popular due to the widespread adoption of smartphones and the growing
trend of consumers using their mobile devices for various online activities. It provides businesses with new
opportunities to reach and engage customers, offering them a more convenient and accessible way to make
purchases and transactions.

Social Commerce
 Social commerce refers to the intersection of social media and e-commerce, where online
shopping experiences are integrated with social networking features. In other words, it involves
using social media platforms as a means to discover, share, and purchase products or services.
 Key elements of social commerce include:
1. Social Media Integration: Social commerce platforms leverage social media channels such as
Facebook, Instagram, Twitter, and others to facilitate shopping experiences. Users can discover
products through their social feeds, interact with them, and make purchases without leaving
the social media platform.
2. User-Generated Content (UGC): Social commerce often relies on user-generated content, such
as reviews, ratings, and photos shared by customers. This helps build trust and credibility for
products or brands.
3. Influencer Marketing: Influencers play a significant role in social commerce by promoting
products to their followers. Brands collaborate with influencers to showcase their products, and
followers can make purchases directly through the influencers' social media profiles.

Social Commerce
4. Social Shopping Features: Social commerce platforms incorporate features that allow
users to browse, select, and purchase products within the social media environment. This
can include shoppable posts, in-app checkout, and other seamless shopping experiences.
5. Community Engagement: Social commerce aims to create a sense of community around
brands and products. This involves fostering engagement and interaction among users,
such as discussions, recommendations, and sharing experiences related to products.
6. Real-Time Interaction: Some social commerce platforms enable real-time interactions
between sellers and buyers, such as live streaming, Q&A sessions, and product
demonstrations. This helps create a more engaging and interactive shopping experience.
7. Personalization: Social commerce leverages data and algorithms to provide personalized
product recommendations based on users' preferences, behavior, and social interactions.

Social Commerce
 Examples of social commerce include Instagram Shopping, Facebook Marketplace, and

Pinterest Shopping. These platforms allow users to discover and purchase products
directly within the social media interface.
 Overall, social commerce aims to capitalize on the social nature of online interactions,
making the shopping experience more social, interactive, and convenient for users. It blurs
the lines between socializing and shopping, creating a more integrated and seamless
online retail experience.

E-Commerce: Technological Building
Blocks
The infrastructure of an e-commerce system relies on several technological building blocks,
and the internet, web, and mobile applications play crucial roles in shaping the overall
architecture. Here's an overview of these components:
1.Internet:
•The backbone of e-commerce infrastructure, the internet enables communication and
data transfer between various components of the system.
•Secure protocols such as HTTPS are often employed to ensure the confidentiality and
integrity of data exchanged over the internet.
•Content Delivery Networks (CDNs) may be used to optimize the delivery of web
content, ensuring faster loading times for users across the globe.

Blocks
2.Web Applications:
•Front-End: The user interface (UI) that customers interact with is typically built using
web technologies such as HTML, CSS, and JavaScript.
•Back-End: The server-side of the application, where business logic, database
interactions, and authentication take place. Common programming languages for back-
end development include Python, Ruby, Node.js, and PHP.
•Frameworks: Many e-commerce platforms use web frameworks such as Django, Ruby
on Rails, Express.js, or Laravel to streamline development.

Blocks
3.Mobile Applications:
•Native Apps: These are platform-specific applications developed for a particular mobile
operating system (iOS or Android) using languages like Swift or Kotlin.
•Hybrid Apps: Developed using frameworks like React Native or Flutter, these provide a
cross-platform solution, allowing code reuse between iOS and Android applications.
•Progressive Web Apps (PWAs): Web applications that offer a mobile-app-like experience
across different devices. They can be accessed through web browsers and are designed
to work offline as well.
4.Database Management System (DBMS):
•E-commerce platforms require efficient and scalable databases to store product
information, user data, and transaction records.

Blocks
•Relational databases (e.g., MySQL, PostgreSQL) or NoSQL databases (e.g., MongoDB,
Cassandra) may be used, depending on the specific requirements of the application.
5.Security Measures:
•Secure Sockets Layer (SSL) or Transport Layer Security (TLS) protocols are implemented
to encrypt data transmitted between the user and the server, ensuring secure
transactions.
•Firewalls, intrusion detection systems, and regular security audits help protect against
cyber threats and ensure the integrity of the e-commerce platform.

6.Payment Gateways:
•Integration with secure payment gateways is crucial for processing online transactions.
Popular examples include PayPal, Stripe, and Square.
7.Content Management System (CMS):
•A CMS is often used to manage and update product information, images, and other
content on the e-commerce website.
8.Analytics and Monitoring Tools:
•Integration with tools like Google Analytics helps in tracking user behavior, monitoring
site performance, and making data-driven decisions for business improvement.
These building blocks work together to create a robust e-commerce infrastructure that
provides a seamless and secure shopping experience for users.

DOS Attack
 A Denial-of-Service (DoS) attack is an attack tageted to shut down a machine or network,

making it unable to access to its intended users.
 DoS attacks accomplish this by flooding the target with traffic, or sending it information
that triggers a crash. In both instances, the DoS attack deprives legitimate users (i.e.
employees, members, or account holders) of the service or resource they expected.
 There are two general methods of DoS attacks:
➢ flooding services
➢ crashing services

Unauthorized Access
 Illegal access to systems, applications or data

 Spoofing- It is when an attacker impersonates an authorized device or user to steal data,
spread malware, or bypass access control systems.
 Example:- An example of spoofing is when an email is sent from a false sender address,
that asks the recipient to provide sensitive data. This email could also contain a link to a
malicious website that contains malware.

Theft and Fraud
 Data theft
 Fraud occurs when the stolen data is used or modified
 Theft of software via illegal copying from company’s servers
 Theft of hardware, specifically laptops

Privacy
 Threats to data
 Usage Tracking : Patterns of online activity lead to inferences about the user’s product
preferences for providing customized pop-up ads and referring sites.

Perceptual Issue
 Trust issues:- Main Trust Issues when buying online:

➢ Fear of getting the delivery late
➢ Fear of not receiving an item or receiving the defective or wrong item
➢ Uncertainty of money-back guarantee and distrust of returns policy
➢ Bad design of web interface
➢ Unknown merchant
➢ Fear of false or fake reviews or no reviews
➢ Fear of online payments and sharing credit/ debit card details online.

Societal Issue
 Workforce shortage (large number of unfilled IT positions)

 Global movement of IT workers (“brain drain”) from developing countries to developed
ones for higher salaries

Legal and Ethical Issues
 Digital signatures : These are used for 2 purposes

 Authenticate identity of person doing signatures
 Nonrepudiation
 Consumer Protections
 Return Policies

Non-repudiation
 Non-repudiation is a legal concept used for information security. It refers to a service,

which provides proof of the origin and integrity of data.
 Non-repudiation makes it difficult to deny successfully who or where a message belongs
to. i.e. authenticity of that message.

Intellectual Property Issues
 Protection
➢ Copyrights – software, arts (literature, artwork, music)
➢ Patents
➢ Trademarks – name brands and logos

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E- Commerce:

Meaning and Terminology

Dr. Vani Kapoor Nijhawan

Dr. Vani Kapoor Nijhawan

 Buying and selling product online

Dr. Vani Kapoor Nijhawan

Dr. Vani Kapoor Nijhawan

E-Commerce is a narrow concept and it is E-Business is a broad concept and it is

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It requires the use of multiple websites,

E-Commerce covers outward/external E-Business covers internal as well as external

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Goals organizations keep in mind while doing E-business

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 Hidden Costs:- Although buying online is convenient, the cost of this

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 Network Unreliability:- Although the Internet is designed to overcome the

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 Low Service Levels:- Another common complaint about doing business

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 An Electronic Market is where we make use of information and

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 Internet commerce is the trading done using internet enabled

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 Electronic data interchange (EDI) is the process used by

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4. Automation and Efficiency:

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 Step 1: Prepare the documents to be sent

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 Step 2: Translate the documents into EDI format

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There are five types of E-Commerce:-

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The evolution of e-commerce continues as technology advances, consumer behavior evolves,

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Trade Cycle: Repeat Credit Cash

After Sales After Sale

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 Emphasis on the search phase of the trade cycle

After Sales After Sale

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After Sales After Sale

After Sales After Sale

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It has fixed timings It is available 247365