Chapter 1

Introduction to E-commerce
1.1. THE FIRST THIRTY SECONDS: WHY YOU SHOULD STUDY 
E-COMMERCE

 Technology
 Entrepreneurs
 Growth in career and employment opportunities
 The twenty-first century will be the age of a digitally enabled social
and commercial life
 Covid-19 pandemic; impact on many aspects of life, ranging from
how businesses operate, to consumer behavior, to social and
cultural life
 It is important to study e-commerce in order to be able to perceive
and understand the opportunities and risks that lie ahead
1.1. THE FIRST THIRTY SECONDS: WHY YOU SHOULD STUDY 
E-COMMERCE

 You will be able to identify the technological, business, and social forces
that have shaped, and continue to shape, the growth of e-commerce, and
be ready to participate in, and ultimately guide, discussions of e-commerce
in the firms where you work
 You will be able to analyze an existing or new idea for an e-commerce
business, identify the most effective business model to use, and
understand the technological underpinnings of an e-commerce presence,
including the security and ethical issues raised, as well as how to optimally
market and advertise the business, using both traditional e-marketing tools
and social, mobile, and local marketing
1.2. INTRODUCTION TO E-COMMERCE
I. WHAT IS E-COMMERCE?
 E-commerce: the use of the Internet, the Web, and mobile
apps and browsers running on mobile devices to transact
business.
 More formally, digitally enabled commercial transactions
between and among organizations and individuals

 The Internet is a worldwide network of computer networks

 The Web is one of the Internet’s most popular services,
providing access to billions of web pages
> An app (shorthand for application) is a software application
1.2. INTRODUCTION TO E-COMMERCE
I. WHAT IS E-COMMERCE?
 A mobile browser is a version of web browser software
accessed via a mobile device
 Digitally enabled transactions include all transactions
mediated by digital technology. For the most part, this means
transactions that occur over the Internet, the Web, and/or via
mobile devices.
 Commercial transactions involve the exchange of value
(e.g.money) across organizational or individual boundaries in
return for products and services.
 Exchange of value is important for understanding the limits
of e-commerce. Without an exchange of value, no commerce
occurs.
1.2. INTRODUCTION TO E-COMMERCE
II. THE DIFFERENCE BETWEEN E-COMMERCE AND
E-BUSINESS
 E-business the digital enabling of transactions and processes
within a firm, involving information systems under the control
of the firm
 e-business does not include commercial transactions
involving an exchange of value across organizational
boundaries
 a firm’s e-business infrastructure provides support for online
e-commerce exchanges
 E-commerce and e-business systems blur together at the
business firm boundary, at the point where internal business
systems link up with suppliers or customers
1.2. INTRODUCTION TO E-COMMERCE
II. THE DIFFERENCE BETWEEN E-COMMERCE AND
E-BUSINESS
1.2. INTRODUCTION TO E-COMMERCE
III. TECHNOLOGICAL BUILDING BLOCKS UNDERLYING
E-COMMERCE: THE INTERNET, WEB, AND MOBILE
PLATFORM

 Internet: worldwide network of computer networks built on

common standards
 World Wide Web (the Web): an information system running
on Internet infrastructure that provides access to billions of
web pages
 mobile platform: provides the ability to access the Internet
from a variety of mobile devices such as smartphones and
tablets
1.2. INTRODUCTION TO E-COMMERCE
IV. MAJOR TRENDS IN E-COMMERCE

 The major trends in e-commerce in 2020–2021 from a

business, technological, and societal perspective
1. Business; the Covid-19 pandemic fuels a surge in retail
e-commerce and m-commerce, on-demand service,
small businesses and entrepreneurs
2. Technology; a mobile computing and communications
platform, cloud computing, The Internet of Things (IoT)
3. Society; user-generated content, published online as social
network posts, online security, spam remains a significant
problem
1.3. UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

 Figure 1.4 illustrates eight unique features of e-commerce technology that

both challenge traditional business thinking and help explain why we have
so much interest in e-commerce.
1.3. UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

1. Ubiquity: available just about everywhere, at all times

2. Global reach: the total number of users or customers an e-commerce
business can obtain
3. Universal standards: standards that are shared by all nations around the
world
4. Richness: the complexity and content of a message
5. Interactivity: technology that allows for two-way communication between
merchant and consumer
6. Information density: the total amount and quality of information available to
all market participants
1.3. UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

7. Personalization: the targeting of marketing messages to specific individuals

by adjusting the message to a person’s name, interests, and past purchases
Customization: changing the delivered product or service based on a user’s
preferences or prior behavior
8. Social technology: user-generated content and social networks –
e-commerce technologies have evolved to be much more social by allowing
users to create and share content with a worldwide community
1.4. TYPES OF E-COMMERCE
I. BUSINESS-TO-CONSUMER (B2C) E-COMMERCE

 Business-to-consumer (B2C) e-commerce: online businesses

selling to individual consumers
 B2C e-commerce includes purchases of retail goods; travel,
financial, real estate, and other types of services; and online
content

II. BUSINESS-TO-BUSINESS (B2B) E-COMMERCE

 Business-to-business (B2B) e-commerce: online businesses
selling to other businesses
1.4. TYPES OF E-COMMERCE

II. BUSINESS-TO-BUSINESS (B2B) E-COMMERCE

 There are two primary business models used within the B2B
arena: Net marketplaces, which include e-distributors,
e-procurement companies, exchanges, and industry
consortia, and private industrial networks

III. CONSUMER-TO-CONSUMER (C2C) E-COMMERCE

 consumer-to consumer (C2C) e-commerce: consumers
selling to other consumers
 Craigslist, eBay, and Etsy were the original C2C platform
provider pioneers in the United States
1.4. TYPES OF E-COMMERCE
IV. MOBILE E-COMMERCE (M-COMMERCE)
 Mobile e-commerce (m-commerce): use of mobile devices to
enable online transactions
 mobile consumers can purchase products and services, make
travel reservations, use an expanding variety of financial
services, access online content, and much more

V. SOCIAL E-COMMERCE
 Social e-commerce: e-commerce enabled by social networks
and online social relationships
1.4. TYPES OF E-COMMERCE

V. SOCIAL E-COMMERCE
 The growth of social e-commerce is being driven by a number
of factors, including the increasing popularity of social sign-on
(signing onto websites using your Facebook or other social
network ID), network notification (the sharing of approval or
disapproval of products, services, and content), online
collaborative shopping tools, social search (recommendations
from online trusted friends), and the increasing prevalence of
integrated social commerce tools such as marketplace groups
and virtual shops on Facebook, Instagram, Pinterest, YouTube,
and other social networks
1.4. TYPES OF E-COMMERCE
VI. LOCAL E-COMMERCE
 Local e-commerce: e-commerce that is focused on engaging
the consumer based on his or her current geographic location
 Uber > Gojek dan Grab
 Groupon
1.5 E-COMMERCE: A BRIEF HISTORY
1.5 E-COMMERCE: A BRIEF HISTORY
1.6. UNDERSTANDING E-COMMERCE:
ORGANIZING THEMES
 We have found it useful to think about e-commerce as
involving three broad interrelated themes: technology,
business, and society
 Technologies develop first, and then those developments are
exploited commercially.
 Once commercial exploitation of the technology becomes
widespread, a host of social, cultural, and political issues
arise, and society is forced to respond to them
1. Technology: infrastructure
2. Business: basic concepts
3. Society: taming the juggernaut
1.7. ACADEMIC DISCIPLINES CONCERNED WITH
E-COMMERCE
 The phenomenon of e-commerce is so broad that a
multidisciplinary perspective is required.
 There are two primary approaches to e-commerce: technical
and behavioral
1. Technical approaches; computer scientists, operations
management scientists > they are interested in e-commerce
as an opportunity to study how business firms can exploit
the Internet to achieve more efficient business operations
> Technical groups within the information systems specialty
focus on data mining, search engine design, and artificial
intelligence.
1.7. ACADEMIC DISCIPLINES CONCERNED WITH
E-COMMERCE

 There are two primary approaches to e-commerce: technical

and behavioral
2. Behavioral approaches: from a behavioral perspective,
information systems researchers are primarily interested in
e-commerce because of its implications for firm and industry
value chains, industry structure, corporate strategy, and
online consumer behavior
> economists, marketing profession, management scholars,
finance and accounting scholars, sociologists, legal scholars
1.8. CAREERS IN E-COMMERCE

 The digital Internet/e-commerce economy is growing rapidly, and is

expected to continue to do so, and prospects for employment are promising
1. The Company
 The company is a large global retailer that is rapidly expanding its online
and mobile operations.
 The company is seeking to develop omni-channel e-commerce capabilities
based on world-class pricing technology, automated warehouses, and an
advanced fulfillment program that combines its retail stores with online and
mobile sales.
 The company has hundreds of different product categories and operates
multiple branded websites.
1.8. CAREERS IN E-COMMERCE

2. Position: Category specialist in the e-commerce retail program

 You will manage the performance of your category of products across the
firm’s websites and apps:
a. Manage and monitor the introduction of new products and establish
processes to ensure they are available at stores and online.
b. Improve the online user experience browsing and searching for products
c. Manage item and category pages including graphics, customer reviews, and
content. Find new ways in which our customers can discover products online
d. Optimize pricing of our products and benchmark competitor prices.
e. Analyze product performance, identify key trends, and suggest how the firm
can improve its revenues, customer service, and margins.
f. Work with cross-functional teams in marketing, customer relationship management,
and supply chain management to execute initiatives to optimize category performance.
1.8. CAREERS IN E-COMMERCE

3. Qualifications/Skills
a. Bachelor’s degree with a strong academic background
b. an entrepreneurial attitude
c. Strong attention to detail
d. Strong communication and teamwork skills
e. Strong analytical and critical thinking skills
f. Ability to work in an ambiguous environment, face challenges, and solve problems
g. Negotiation and persuasion skills
h. Fast learner, with an ability to absorb information and experiences and apply them

4. Preparing for the interview

End of Chapter 1