BIT 2231-E-Biz: Harnessing the

Business with e-Market

E-commerce

Byungura Jean Claude (PhD)

Department of Business Information Technology
(BIT)

E-BIZ 2020
Part 1
• E-Governance
• ICT and Rural Development
• E-Records Management and Access to
Government Services
• E-Democracy: e-campaigning

Part 2
• E-commerce
• E-payments
• E-marketing
Plan of the talk
• Introduction to e-commerce and e-commerce
applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References
A definition for e-commerce
• A universally accepted definition does not exist
• Anything that uses electronic technology in order to do
business can be intended as e-business
• We can look at e-commerce as to a subset of e-business
concerning commerce
• Commerce is intended as the activity of exchanging goods
and services with some kind of payment
• Commerce refers to all the activities including the
purchase and sales of goods or services.
– Marketing, sales, payment, fulfillment, customer service

• Electronic commerce is doing commerce with the use

of computers, networks and commerce-enabled
software (more than just online shopping)
The EU definition for e-commerce
• “e-commerce is based on the electronic processing
and transmission of data. It encompasses many
diverse activities including electronic trading of goods
and services, on-line delivery of digital content,
electronic fund transfer, electronic share trading,
public procurement.” (EU(97)/157)
Origins of e-commerce applications
• E-commerce applications existed long before Internet
– EDI (Electronic Data Interchange)
– EFT (Electronic Funds Transfer)
• Internet offered the general public the opportunity to
conduct businesses online
• Currently, many businesses operating online (Small,
Middle and Large Companies)
 Brief History
• 1970s: Electronic Funds Transfer (EFT)
– Used by the banking industry to exchange account information over secured
networks
• Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce
within companies
– Used by businesses to transmit data from one business to another
• 1990s: The World Wide Web on the Internet provides easy-to-use technology
for information publishing and dissemination
– Cheaper to do business (economies of scale)
– Enable diverse business activities (economies of scope)
 E-commerce applications

• Supply chain management

• Video on demand
• Remote banking
• Procurement and purchasing
• Online marketing and advertisement
• Home shopping
• Auctions
 E-commerce infrastructure: Categories

• Information superhighway infrastructure

– Internet, LAN, WAN, routers, etc.
– telecom, cable TV, wireless, etc.
• Messaging and information distribution infrastructure
– HTML, XML, e-mail, HTTP, etc.
• Common business infrastructure
– Security, authentication, electronic payment, directories,
catalogs, etc.
Taxonomy of e-commerce applications
• Three main categories:
– Business to consumer (B2C)
– Business to business (B2B)
– Consumer to consumer (C2C)
• Other categories:
– Business to government (B2G)
– Mobile Commerce
B2C applications
• Offer directly to the customer an interface of activity
– Typical examples:
• Online book store (e.g. amazon.com)
• Online car purchasing (e.g. automall.com)
• Booking and purchase of airline tickets (e.g. ryanair.com)
• Correspond to retail sale
• Growth of B2C applications thanks to Internet
• A new kind of B2C applications are the Cybermalls
B2C applications:
advantages and disadvantages
• Advantages:
– Allow company to extend existing services to
customers
– Allow company to increase its customers
– Offer a wider choice and allow cheaper prices
– May give to the company a worldwide visibility
– Online shops are accessible 24h a day
• Disadvantages:
– Low order conversion rates
– High risk
B2B applications
• Realize transactions needed to perform financial or
commercial activities by companies over the Internet
• Some typical applications:
– E-procurement
– E-Marketplace
• The turnover is much greater than that dealed with
B2C applications
B2B applications:
advantages and disadvantages
• Advantages:
– Help to automate communications between companies
making them easier and quicker
– Allow to cut prices drastically
– Help in reducing mistakes
• Disadvantages:
– Often need legacy integration
C2C applications
• Concern the consumers who run negotations with
other consumers sometimes utilizing as intermediary a
company
– Examples:
• Ebay
• Amazon.com
C2C applications:
advantages and disadvantages
• Advantages
– Allow consumers to interact directly among them
– Give to the consumers a new way of purchasing and selling
services and goods
• Disadvantages
– Little earning capacity
B2G applications
• Correspond to all kind of transactions between
company and public administrator
• Utilized mostly in the USA
Mobile commerce applications
• Concern doing businesses by means of mobile wireless devices
• Can be both B2B and B2C
• Have a growing importance in the future of e-commerce
applications
• Will introduce completely new forms of electronic commerce
– E.g. E-tickets
• The development of such applications faces some of the
greatest challenges in the security area to secure the trust of
consumers
 The Main Elements of E-commerce
• Consumer shopping on the Web, called B2C
(business to consumer)
• Transactions conducted between businesses on
the Web, call B2B (business to business)
• Transactions and business processes that support
selling and purchasing activities on the Web
– Supplier, inventory, distribution, payment
management
– Financial management, purchasing products and
information
Advantages of Electronic Commerce
• Increased sales
– Reach narrow market segments in geographically
dispersed locations
– Create virtual communities
• Decreased costs
– Handling of sales inquiries
– Providing price quotes
– Determining product availability
• Being in the space
 Disadvantages of Electronic Commerce

Loss of ability to inspect products from remote

locations
Rapid developing pace of underlying technologies
Difficult to calculate return on investment
Cultural and legal impediments
 The process of e-commerce
1. Attract customers
– Advertising, marketing
2. Interact with customers
– Catalog, negotiation
3. Handle and manage orders
– Order capture
– Payment
– Transaction
– Fulfillment (physical good, service good, digital good)
4. React to customer inquiries
– Customer service
– Order tracking
 E-commerce Technologies

 Internet  Access security

 Mobile technologies  Cryptographic security
 Web architecture  Watermarking
 Component programming  Payment systems
 Data exchange
 Multimedia
 Search engines
 Data mining
 Intelligent agents
E-commerce Technologies: For Near Future.

• Mobile (Smartphones) - A King

• While desktop still beats mobile devices as the
primary method consumers use to make
eCommerce purchases, that won’t last long.
• eCommerce global trends indicate that mobile
devices will become the central piece of technology
used to discover, research, and purchase goods and
services.
E-commerce Technologies: For Near Future.
• Mobile Apps & eWallet Technology
• While mobile optimization will be a prime concern for
eCommerce businesses going forward, that alone
isn’t enough anymore. You need integrated mobile
wallet functionality.
• Additionally, companies should consider launching a
mobile app.
• An encompassing mobile platform is one of the key
eCommerce technology trends in 2018.
E-commerce Technologies: For Near Future.
• Mobile Apps & eWallet Technology
• Because so many consumers shop online,
they understand the benefits and added
security of using a mobile wallet.
• That means your mobile customers expect to
use a mobile wallet to finalize a purchase.
• Adding mobile wallet functionality can help
you increase sales and boost your
conversion rate.
E-commerce Technologies: For Near Future.
• Subscription Services
• Because so many consumers shop online,
they understand the benefits and added
security of using a mobile wallet.
• That means your mobile customers expect to
use a mobile wallet to finalize a purchase.
• Adding mobile wallet functionality can help
you increase sales and boost your
conversion rate.
 E-commerce Technologies: For Near Future.
• Subscription Services
• Subscription services aren’t new. In fact, online subscription
services have already impacted the eCommerce industry (Eg.
Amazon Prime and Netflix).
• eCommerce technology trends indicate that personalized
subscription services will continue to emerge as power players.
• Subscription services are becoming a common aspect of the
digital retail industry. Ed.: Fashion to entertainment, personal grooming,
and even homemade meals
• That’s because they fulfill two related retail needs for both (1)
consumers and (1) providers.
 E-commerce Technologies: For Near Future.
• Subscription Services
• One advantage of Subscription Services is that:
• Clients no longer need to shop for certain products and
services.
• Subscriptions take the forethought out of many banal,
everyday purchases, eliminating time consuming and
costly trips to a store.
• It is easy for companies to deal online with subscribed
customers
 E-commerce Technologies: For Near Future.
• Product Customization & Personalized Recommendations
• Product customization will grow from recommended items and
remarketing ads to truly personalized offerings.
• Eg.: The more you watch youtube videos, you will get related ones
• The ability to customize products is also an important component of
the previous trend; subscription based services.
• The same process is being used by many different businesses across
the web.
• From clothing choices to entertainment, furniture, even in our possible,
product customization is more than a trend, it’s the shape of the web
to come.
 E-commerce Technologies: For Near Future.
• Product Visualization, Augmented Reality, and Virtual
Reality
• One of the biggest global trends in eCommerce will be product
visualization.
• Product visualization has changed dramatically over the past few years.
• Evolving from small, hard to view images to multiple images from different
perspectives, the ability to zoom, customer uploaded images, etc.
• Even with these changes, recent technological advances in 3D,
augmented reality, and virtual reality are poised to change the way
products are visualized.
Product Visualization, Augmented Reality, and Virtual Reality
 E-commerce Technologies: For Near Future.
• Product Visualization, Augmented Reality, and
Virtual Reality
• A major drawback to online shopping is lack of tactile
information.
• In other words, it can be hard to imagine how a
product will look in your home or office, or what an
outfit will look like in a home mirror, or even what it
feels like to be inside a hotel room.
• The future of product visualization is attempting to
bridge that gap.
Augumented Reality with 3D
 E-commerce Technologies: For Near Future.
• Product Visualization, Augmented Reality, and
Virtual Reality
• Augmented reality, a technology that superimposes digital
images on a user’s view of the real world through their mobile
device, is changing the way consumers can imagine products
before they buy.
• Virtual reality, where users “enter” an immersive virtual world with a VR
headset and compatible 360 video, allows clients to virtually experience
a product before the make a purchase.
• These eCommerce technology trends will impact the way
consumers make decisions about products and services.
• Product visualization will continue to be a bigger part of the
digital retail environment.
Trigger purchase decision!
Search Online Products using a photo option
 Get Ready For The Future of E-commerce
• Exciting things are coming in the near future for the eCommerce
industry.
• Mobile platforms are the future of eCommerce and are more
important than ever.
• Subscription services look to gain a larger percentage of the
digital market.
• The way products are marketed and showcased is about to take a
major leap forward toward new eCommerce high tech tools.
• Ensure your eCommerce site is ready for the near future by
adapting these trends into your business plan.
Plan of the talk
• Introduction to e-commerce and e-commerce
applications
• Issues in developing e-commerce applications
• Architecture of e-commerce applications
• Bookstore example
• Perspectives for e-commerce
• References
Issues in developing e-commerce applications
(1/2)
• Many of the following issues:
– Security
– Flexibility
– Scalability
– Fault tolerance
– Integration
– Interfaces (graphical and not)
– Time-to-market
……are common to many applications, but they are all critical
in the case of e-commerce because of its nature
Issues in developing e-commerce applications
(2/2)
• A state-of-the-art application always fail if people do not utilize
it
– A constant attention must be payed to the users over the whole
development process
• A close integration with every business aspect is needed:
– For an online buyer security and easy access to the informations are
the primal needs
– A manager will need a flexible application to adapt the business to the
new trends in a faster way
Security Issues
• Security is a crucial feature
– Most transactions take place in a fully automated way
– Restricted data are transmitted through a public network
• Users must be sure that their money will not be lost or
stolen
Flexibility Issues
• E-commerce systems are subject to frequent
structural changes because of mutations of:
– Products and services provided by the firm
– Commercial partnerships
Scalability
• Capability to support a certain number of users
(thousands, even millions) without compromising
performances
• It is important because a slow application often means
to lose customers (especially in B2C) since they have
very small patience
Fault tolerance
• A less fault-tolerant application will be less available to
the user
• Every minute that a site is not available costs 1400$ to
the company (survey on 400 major companies by
Oracle)
• It is easy to lose customers forever
• It is necessary to redirect the users without they
perceive it
Integration
• Always needed since no application offering every
commercial functionality can be realized
• Critical because the commercial funcionalities are often
realized by many different legacy and third-party applications
– Examples:
• ERP systems
• Legacy systems
User Interfaces
• Must be intuitive,easily comprehensible and of simple
utilization
• In the case of B2C must support profiling in order to
anticipate the customer requests
• They also need to be customizable
Multi-channel interfaces
• Application interfaces must support several kinds of
connections:
– Web browsers
– Web TV
– Cellular phones (via WAP)
– PDA
Time-to-market
• Has greater importance than elsewhere
• Emphasis on COST and reuse
End of Lecture