Electronic Commerce

Distributing, buying, selling, marketing

and Servicing of products or services
over electronic systems such as
computer and other networks.

It is an electronic business application

aimed at commercial transactions.
Definition of Commerce
• The exchange of goods and services for
money
• Consists of:
Buyers - these are people with money
who want to purchase a good or service.
Sellers - these are the people who offer
goods and services to buyers.
Producers - these are the people who
create the products and services that
sellers offer to buyers
Distribution Channel
• Distribu
tor Retailer

Tradition
al
Supplier
Channels Customer

E-
Supplier Commer
ce
Customer
Elements of Commerce
• You need a Product or service to sell
• You need a Place from which to sell the
products
• You need to figure out a way to get
people to come to your place.
• You need a way to accept orders.
• You also need a way to accept money.
• You need a way to deliver the product or
service, often known as fulfillment.
• Sometimes customers do not like what
they buy, so you need a way to accept
returns.
• You need a customer service and
technical support department to assist
 Characteristics of e-
commerce
 Exchange of Digitized Information
between Parties
 communication, coordination for the
transmission of goods/ services
 It is technology enabled (web
browsers, ATM interfaces)
 Technology mediated transactions
more than human contact.
 Intra and inter organizational
activities that exchange in Business
environment.
 Characteristics of e-
commerce
 Universal Standards shared by all
nations.
 Information density with technology
reducing the cost of Information and
raising the quality of information.
 Richness of the data: Text, graphic,
Audio, and Video
 Dynamic (continuous change)
 Customization and interactivity;
sense and respond – listening to
customers in a new way.
 Advantages of E-
Commerce
 Complements traditional business
 24 X 7 operations
 Global reach
 Relatively less cost of acquiring,
serving, and retaining customers
 An extended enterprise including
suppliers, retailers, and customers is
easy.
 Disintermediation:Reduced
intermediaries between customer
and supplier
 Advantages of E-
Commerce
 A technology based customer interface
with GUI and interactivity which does
not need unnecessary follow ups
 Interaction controlled by customer.(Any
time interaction can be closed)
 Easy to observe and track customer/
consumer behavior
 Network economics: In Information
centric industries gain more mileage.
 Financial Institutions can reduce the no.
of branches due to increasing online
transactions.
 Friction free commerce
 Disadvantages of E-
commerce
 Perishable foods, highly expensive
jewellery, antiques may be difficult to
inspect from remote location.
 With emerging and dynamic technology
like E-Commerce, it is difficult to
calculate ROI
 Micro transactions may include more
transaction charges than product price.
 Difficulty in integrating online and off-
line processes.
 Recruitment and retention of technical
people.
 Cultural and legal obstacles.(cyber laws
not sufficient enough and security
 Disciplines concerned
with E-commerce
Management Computer
science science

Economics

Sociology

Finance &
Information Accounting
System

Marketing
E-Commerce I (1995 – 2000) Vs E-Commerce II (2001
onwards)

 Technology driven  Business Driven

 Revenue growth  Earning and profit
emphasis emphasis
 Traditional financing
 Venture capital  Strong regulation and
financing governance
 Ungoverned  Large traditional firms
 Strengthening
 Entrepreneurial intermediation
 Disintermediate  Imperfect with
markets, brands,
network effect
 Perfect markets  Mix of “click and
 Pure online strategy brick”
 First mover  Strategic follower
advantage
 Challenges for e-
Commerce
 One world, the web world may
expect “one price”; entrepreneurs
must find ways to show
differentiation in product and
service.
 Nearly 65% of transactions stop at
shopping cart level because of
customer uncertainties.
 Constantly changing prices not
realistic.
 Security concerns among people
Different types of E-Commerce
Business Customer
(Individual)
(Organisatio
n)

B2B B2C
Business (e.g TPN) (e.g Amazon)
(organizatio
n)

Customer C2B C2C

(individual) (e.g Priceline) (e.g eBay)
 Business to Business (B2B) refers to the full
spectrum of e-commerce that can occur
between two organizations.
This includes purchasing and procurement,
supplier management, inventory management,
channel management, sales activities, payment
management &service and support.
Examples: FreeMarkets, Dell and General
Electric

 Business to Consumer (B2C) refers to

exchanges between business and consumers,
activities tracked are consumer search,
frequently asked questions and service and
support.
Examples: Amazon, Yahoo and Charles Schwab
& Co
Peer to Peer (C2C) exchanges
involve transactions between and
among consumers. These can
include third party involvement,
as in the case of the auction
website Ebay.
Examples: Owners.com, Craiglist,
Monster

Consumer to Business (C2B)

involves when consumers band
{Feel good and provide
special}
• Encourage customer loyalty
– Members-only area
– E-club with offers/discounts/freebies
– Appreciate their business

• Keep in touch with your

customers
- e-mail on a regular basis
- Newsletters
- Contests
- Notification of new giveaways
 Conclusions
• Change is unavoidable
• Most e-commerce prerequisites follow
from making the right domestic policy
decisions
– Get policy right
– Telecom/internet build-out follows
• Avoid undue restrictions on internet
– Content control
– Voice revenue support understandable but
harmful
• Government can lead by implementing
e-government
– Develops the market
– Leads to better government