COMPUTER

APPLICATION
FOR BUSINESS
II

What is Commerce
Commerce is the whole system of an
economy that constitutes an environment for
business.
Commerce is a branch of business. It is
concerned with the exchange of goods and
services. It includes all those activities, which
directly or indirectly facilitate that exchange.
Commerce is concerned with the distribution
of goods & services.

What is E-Commerce
Electronic commerce, commonly known
as e-commerce, is a type of industry
where buying and selling of product or
service is conducted over electronic
systems such as the Internet and other
computer networks.

What is E-Commerce
E-commerce involves digitally
enabled commercial transactions
between and among organizations
and individuals.
The buying and selling of products
and services by businesses and
consumers through an electronic
medium, without using any paper
documents.

What is E-Commerce
A type of business model that
enables a firm or individual to
conduct business over an electronic
network, typically the internet.

What is E-Commerce

What is E-Commerce

What is E-Commerce

History of E-Commerce
The growth and acceptance of credit
cards, automated teller machines
(ATM) and telephone banking in the
1980s were also forms of electronic
commerce.
Another form of E-Commerce was the
airline reservation system, for
example Sabre in the USA and
Travicom in the UK.

 By the end of 2000, many

European and American
business companies offered
their services through the
World Wide Web.
Since then people began to
associate a word ECommerce" with the ability of
purchasing various goods
through the Internet using
secure protocols and electronic
payment services.

Amazon.com:
Before and After

Amazon.com: Before and

After

Most well-known e-commerce company

Conceived by Jeff Bezos in 1994
Opened in July 1995
Four compelling reasons to shop

Selection (1.1 million titles)

Convenience (anytime, anywhere)
Price (high discounts on bestsellers)
Service (automated order confirmation,
tracking, and shipping information)

Amazon.com: Before and

After
Revenues and Earnings
Revenues

Earnings

1996

$15.6 Million

($6.24 Million)

1997

$148 Million

($31 Million)

1998

$610 Million

($125 Million)

1999

$1.6 Billion

($720 Million)

2000

$2.7 Billion

($1.4 Billion)

Advantages of E-commerce
Faster buying/selling procedure, as well as
easy to find products.
Buying/selling 24/7.
Low operational costs and better quality of
services.
Easy to start and manage a business.
No need of physical company set-ups.
Customers can easily select products from
different providers without moving around
physically.

Disadvantages of E-commerce
There is no guarantee
of product quality.
There are many
hackers who look for
opportunities, and
thus an ecommerce
site, service, payment
gateways, all are
always prone to
attack.

E-commerce vs. E-business

E-commerce involves

Digitally enabled commercial transactions

between organizations and individuals.
Digitally enabled transactions include all
transactions mediated by digital technology
Commercial transactions involve the
exchange of value across organizational or
individual boundaries in return for products
or services

E-commerce vs. E-business

E-business involves

Digital enablement of transactions and

processes within a firm, involving
information systems under the control
of the firm

E-business does not involve

commercial transactions across
organizational boundaries where value
is exchanged

The Difference Between Ecommerce and E-Business

Electronic Payment System

Electronic commerce was identified
as the facilitation of commercial
transactions electronically, using
technology such as Electronic Data
Interchange (EDI) and Electronic
Funds Transfer (EFT).
What is EDI?
What is EFT?

Electronic Payment System

An electronic payment system facilitates
the acceptance of electronic payment for
online transactions.
Electronic / Online payment usually is the
transaction that results in transfer of
monetary funds from the customer bank or
credit card account to your bank account.

Electronic Payment System

Electronic Payment is a financial exchange
that takes place online between buyers and
sellers.
Online payment services allow business
and consumers to exchange money
electronically over the Internet. With an
online payment service, your business can
receive payment from virtually any
customer with an email account.

Electronic Payment System

Electronic Payment System

Online Payment Process

Customer submits the payment information
to the merchant. For example customer
completes the payment form on the
merchant website and submits the
information.
The merchant submits the payment
information to the online payment gateway.
The online payment gateway submits the
payment to the payment processor.

Online Payment Process

The payment processor authorizes the
payment and responds to the payment
gateway
The payment gateway responds back to the
merchant
The merchant responds back to the
customer showing if the online payment
was successful or not and taking the
appropriate action.

Online Payment Process

Payment Gateway (Service Provider)

Unique of E-commerce Technology

and Their Business Significance
E-commerce:

is ubiquitous

has global reach

operates according to universal

standards

provides information richness

is interactive

increases information density

permits personalization

Seven Unique Features of E-commerce

Technology and Their Business
Significance

Major Types of E-Commerce

Market relationships
Business-to-Consumers (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)

Technology-based
Peer-to-Peer (P2P)
Mobile Commerce (M-commerce)

Major Types of E-Commerce

Business-to-Consumer Ecommerce

Most commonly discussed type

Online businesses attempt to reach individual
consumers, it provides direct selling through online.
Consumers spend $65 billion in 2001.
Businesses selling to the general public typically
through catalogs utilizing shopping cart software.
B2C is the indirect trade between the company and
consumers.
If you want to sell goods and services to customer
so that anybody can purchase any products directly
from suppliers website.

BUSINESS TO BUSINESS
B2B can be open to all
interested parties or
limited to specific, prequalified participants
(private electronic
market).
Companies doing
business with each
other such as
manufacturers selling
to distributors and
wholesalers selling to
retailers.

(B2B)

Business-to-Business Ecommerce

Businesses focus on sell to other

businesses
Largest form of e-commerce
$700 billion in transactions in 2001
Primarily involved inter-business
exchanges at first
Other models have developed
e-distributors
Infomediaries
(informationandintermediary)
B2B service providers

Consumer-to-Consumer Ecommerce

Provide a way for consumers to sell

to each other
Estimated $5 billion market
Consumer:
prepares the product for market
places the product for auction or sale
relies on market maker to provide
catalog, search engine, and
transaction clearing capabilities

CONSUMER TO CONSUMER (C2C)

It facilitates the online transaction of
goods or services between two people.
Though there is no visible intermediary
involved but the parties cannot carry out
the transactions without the platform
which is provided by the online market
maker such as eBay.

CONSUMER TO BUSINESS (C2B)

A consumer posts his project with a set
budget online and within hours companies
review the consumer's requirements and
bid on the project.
The consumer reviews the bids and selects
the company that will complete the
project.
C2B empowers consumers around the
world by providing the meeting ground
and platform for such transactions.

Peer-to-Peer E-commerce

Enables Internet users to share

files and computer resources
Napster

Mobile E-commerce

Wireless digital devices enable

transactions on the Web
Uses personal digital assistants
(PDAs) to connect
Used most widely in Japan and
Europe

E-COMMERCE EXAMPLES:
An individual purchases a book on the
Internet.
A government employee reserves a hotel
room over the Internet.
A business buys office supplies on-line or
through an electronic auction.
A manufacturing plant orders electronic
components from another plant within the
company using the company's intranet.

E-Commerce I and II

E-Commerce I
Explosive growth starting in 1995
Widespread of Web to advertise products
Ended in 2000 when dot.com began to
collapse

E-Commerce II
Began in January 2001
Reassessment of e-commerce companies

E-Commerce I 1995-2000
Disintermediation

displacement of market middlemen

who traditionally are intermediaries
between producers and consumers
by a new direct relationship
between manufacturers and
content originators with their
customers

E-Commerce I 1995-2000
Friction-free commerce
a vision of commerce in which
information is equally distributed
transaction costs are low
prices can be dynamically adjusted to
reflect actual demand
intermediaries decline
unfair competitive advantages are
eliminated

E-Commerce II 2001-2006

Crash in stock market values of E-commerce

I companies throughout 2000 is an end to Ecommerce I
Led to a sobering reassessment of the
prospects of e-commerce and the methods
of achieving business success.

E-Commerce II 2001-2006

Reasons for the end of E-Commerce I

run-up in technology stocks due to enormous information
technology capital expenditure of firms rebuilding their
internal business systems to withstand Y2K
telecommunications industry had built excess capacity in
high-speed fiber optic networks
1999 e-commerce Christmas season provided less sales
growth that anticipated and demonstrated e-commerce was
not easy (eToys.com)
valuations of dot.com and technology companies had risen
so high supporters were questioning whether earnings could
justify the prices of the shares.

E-Commerce I and E-Commerce II

Compared

The Internet and the Evolution of

Corporate Computing

Disciplines Concerned with ECommerce