UNIT -I

E-COMMERCE AND M-
COMMERCE

MRS.BHAVANA JAWALE
 E-commerce (electronic-commerce)

 What is e-commerce?
 E-commerce (electronic commerce) is the buying and selling of goods and
services, or the transmitting of funds or data, over an electronic network,
primarily the internet. These business transactions occur either as business-to-
business (B2B), business-to-consumer (B2C), consumer-to-consumer or
consumer-to-business.
 Eg. In 2011, e-commerce accounted for 5% of total retail sales, according to the
U.S. Census Bureau. By 2020, with the start of the COVID-19 pandemic, it had
risen to over 16% of retail sales.
 How does E-commerce work?
 E-commerce is powered by the internet. Customers access an online store to
browse through and place orders for products or services via their own
devices.
 Eg. the customer's web browser will communicate back and forth with the 
server hosting the e-commerce website. Data pertaining to the order will be
relayed to a central computer known as the order manager. 
 Types of E-commerce
 Business to Consumer (B2C)
B2C ecommerce companies sell directly to the product end-user. Instead of distributing goods to an
intermediary, a B2C company performs transactions with the consumer that will ultimately use the good.
This type of business model may be used to sell products (i.e. your local sporting goods store's website) or
services (i.e. a lawncare mobile app to reserve landscaping services). This is the most common 
business model and is likely the concept most people think about when they hear ecommerce.
 Business to Business (B2B)
Similar to B2C, an ecommerce business can directly sell goods to a user. However, instead of being a
consumer, that user may be another company. B2B transactions are often entail larger quantities, greater
specifications, and longer lead times. The company placing the order may also have a need to set recurring
goods if the purchase is for recurring manufacturing processes.
 Business to Government (B2G)
Some entities specialize as government contractors providing goods or services to agencies or
administrations. Similar to a B2B relationship, the business produces items of value and remits those items to
an entity. B2G ecommerce companies must often meet government requests for proposal requirements,
solicit bids for projects, and meet very specific product or service criteria. In addition, there may be joint
government endeavors to solicit a single contract through a government-wide acquisition contract.
 Types of E-commerce
 Consumer to Consumer (C2C)
Established companies are the only entities that can sell things. Ecommerce platforms such as digital marketplaces
connect consumers with other consumers who can list their own products and execute their own sales. These C2C
platforms may be auction-style listings (i.e. eBay auctions) or may warrant further discussion regarding the item or
service being provided (i.e. Craigslist postings). Enabled by technology, C2C ecommerce platforms empower consumers
to both buy and sell without the need of companies.
 Consumer to Business (C2B)
Modern platforms have allowed consumers to more easily engage with companies and offer their services, especially
related to short-term contracts, gigs, or freelance opportunities. For example, consider listings on Upwork. A consumer
may solicit bids or interact with companies that need particular jobs done. In this way, the ecommerce platform connects
businessess with freelancers to enable consumers greater power to achieve pricing, scheduling, and employment demands.
 Consumer to Government (C2G)
Less of a traditional ecommerce relationship, consumers can interact with administrations, agencies, or governments
through C2G partnerships. These partnerships are often not in the exchange of service but rather the transaction of
obligation. For example, uploading your Federal tax return to the IRS digital website is an ecommerce transaction
regarding an exchange of information. Alternatively, you may pay your tuition to your university online or remit 
property tax assessments to your county assessor.
 Advantages E-commerce
 Convenience: Ecommerce can occur 24 hours a day, seven days a week. Although ecommerce may
take a lot of work, it is still possible to generate sales as you sleep or earn revenue while you are away
from your store.
 Increased selection: Many stores offer a wider array of products online than they carry in their brick-
and-mortar counterparts. And many stores that solely exist online may offer consumers exclusive
inventory that is unavailable elsewhere.
 Potentially lower start-up cost: Ecommerce companies may require a warehouse or manufacturing
site, but they usually don't need a physical storefront. The cost to operate digitally is often less
expensive than needing to pay rent, insurance, building maintenance, and property taxes.
 International sales: As long as an ecommerce store can ship to the customer, an ecommerce company
can sell to anyone in the world and isn't limited by physical geography.
 Easier to retarget customers: as customers browse a digital storefront, it is easier to entice their
attention towards placed advertisements, directed marketing campaigns, or pop-ups specifically aimed
at a purpose.
 Disadvantages of E-commerce
 Limited customer service: If you shop online for a computer, you cannot simply ask an employee to
demonstrate a particular model's features in person. And although some websites let you chat online with a
staff member, this is not a typical practice.
 Lack of instant gratification: When you buy an item online, you must wait for it to be shipped to your
home or office. However, e-tailers like Amazon make the waiting game a little bit less painful by offering
same-day delivery as a premium option for select products.
 Inability to touch products: Online images do not necessarily convey the whole story about an item, and so
ecommerce purchases can be unsatisfying when the products received do not match consumer expectations.
Case in point: an item of clothing may be made from shoddier fabric than its online image indicates.
 Reliance on technology: If your website crashes, garners an overwhelming amount of traffic, or must be
temporarily taken down for any reason, your business is effectively closed until the ecommerce storefront is
back.
 Higher competition: Although the low barrier to entry regarding low cost is an advantage, this means other
competitors can easily enter the market. Ecommerce companies must have mindful marketing strategies and
remain diligent on SEO optimization to ensure they maintain a digital presence.
 E-commerce Applications
 1. Retail
E-retailing, often known as online retailing, is the sale of products and services by businesses to customers via online stores. This is
done through the use of tools such as virtual shopping carts and e-catalogs. There are several e-commerce applications in this
industry.
 2. Accounting
Finance and e-commerce are more intertwined than ever before. Banks and stock exchanges make extensive use of e-commerce in
their operations. Balance checks, bill payments, money transfers, and more services are available through online banking. Online stock
trading allows users to trade stocks online by providing information about equities such as performance reports, analysis, charts, and
so on via websites.
 3. Production
In the manufacturing industry, e-commerce serves as a platform for firms to conduct electronic transactions. Groups of firms can carry
out their activities more smoothly by combining purchasing and selling, exchanging market conditions, inventory check information,
etc.
 4. Trade
Applying e-commerce to trade elevates it to a higher level, allowing individuals to participate without regard for geographical borders.
This encourages more participation, more bargaining and contributes to the success of the trade.
 5. Advertising
Development and commercialization strategies like pricing, product characterization, and customer relationship can be boosted by
utilizing e-commerce. This will give consumers a more enriched and personalized purchasing experience. Digital marketing tactics
have grown in importance as a means of promoting enterprises.
 E-commerce Applications

Digital Shopping
6.

People's buying habits have shifted dramatically in the previous several years. "Go online" has become a success mantra for all
enterprises. Online shopping is easy, pleasant, and, in most cases, inexpensive. The success of online shopping applications
like Flipkart and Amazon demonstrates this.
 7. Web and mobile applications

Mobile commerce or m-commerce application is a subset of retail e-commerce. Mobile or web application development has
become a must-have for companies looking to showcase their skills. Purchases are made by the consumer using mobile or web
applications that are optimized for the merchant. These programs also provide payment security by utilizing secure e-payment
mechanisms.
 8. Digital Reservations

Travel and tourism is a flourishing sector today, and online booking is a developing e-commerce application. Online booking
allows customers to buy travel necessities such as train/flight tickets, book hotel rooms, get tourism packages, transportation
services, and so on. It makes people's trips comfortable and easy because everything can be set at the tip of their fingertips.
 9. Digital Media

E-books and digital periodicals are gradually displacing traditional printed publications. It has numerous advantages, including
portability, lightweight, accessibility from anywhere, and so on. They are also environmentally friendly because they assist in
reducing paper use and saving forests. Because of these factors, internet publication, often known as e-publishing, has grown in
popularity.
 10. Internet Banking

E-Banking, often known as online banking, is an e-commerce program that has streamlined people's time-consuming and
 M-commerce (mobile commerce)
 M-commerce (mobile commerce) is the buying and selling of goods and services through
wireless handheld devices such as smartphones and tablets. M-commerce is a form of 
e-commerce that enables users to access online shopping platforms without the use of a desktop
computer.
 Over time, content delivery through wireless devices has become faster, more secure and
scalable. 
 Examples of m-commerce use in specific industries include the following:
 Financial services. Mobile banking and brokerage transactions are done from mobile devices.
 Telecommunications. Handheld devices are used to make service changes and bill payments,
and to do account reviews.
 Service and retail. Consumers place and pay for orders on-the-fly through online stores.
 How Mobile commerce works
 With most m-commerce enabled platforms, the mobile device is
connected to a wireless network that is used to conduct online product
purchases and other transactions.
 Types of M-commerce
 Mobile shopping enables customers to buy a product using a mobile device with an application such
as Amazon or a web app. A subcategory of mobile shopping is app commerce, which is a transaction
that takes place over a native app.
 Mobile banking is online banking designed for handheld technology. It enables customers to access
accounts and brokerage services, conduct financial transactions, pay bills and make stock trades. This
is typically done through a secure, dedicated app provided by the banking institution. Mobile banking
services may use SMS or chatbots and other conversational app platforms to send out alerts and track
account activities.
 Mobile payments are an alternative to traditional payment methods, such as cash, check, credit and
debit cards. They enable users to buy products in person using a mobile device. Digital wallets, such
as Apple Pay, let customers buy products without swiping a card or paying with cash. Mobile payment
apps.
 Mobile consumers also use QR codes to pay for things on their mobile phones. With mobile
payments, users send money directly to the recipient's cell phone number or bank account.
 Advantages of mobile commerce
 Large customer base. M-commerce provides for a larger customer base and better retention than e-
commerce in general, because m-commerce capabilities are more widely and easily accessible. Also, 
mobile analytics offers insights into customer shopping behavior, pattern and history. To boost
retention rates, businesses can use this data to target shoppers with personalized offers and tailor-made
discounts.
 Convenience. M-commerce makes it easier for customers to compare prices, read reviews and make
purchases when and where they want to do these things.
 Product variety. Customers can browse through a huge inventory of products while also taking
advantage of the competitive pricing.
 Automation. M-commerce automates a business's point of customer contact and sales with a variety
of mobile contactless payment options, such as Apple Pay, PayPal One Touch and Visa Checkout.
Many e-commerce sites also offer one-click checkout process functionality, which enables users to add
payment information only once and then use the one-click option for every purchase made thereafter.
 Omnichannel experience. M-commerce creates an omnichannel experience where products can be
sold via multiple channels -- e-commerce websites, Amazon, eBay, Instagram. This approach makes it
easier for customers to buy whenever and wherever they want.
 Disadvantages of mobile commerce
•Poor execution. The smaller screens of mobile phones and tablets require specific navigation
functionality. Consequently, intuitive mobile user interfaces are complicated and expensive to design.
A poorly executed mobile customer experience can frustrate customers and deter them from making
purchases.
•Payment issues. Mobile payment options are not available in every geographic location and may
not support every type of digital wallet.
•Tax compliance. Businesses must know and comply with tax laws and regulations of all countries
they ship to. Some businesses will avoid this by only authorizing purchases from and shipping to their
country of origin.
•Security vulnerabilities. Many users are still hesitant to make purchases over a mobile device
because of security risks. Even with two-factor authentication, mobile fraud is on the rise and many
merchants have still not adopted fraud prevention practices for the smaller screen. Attacks, such as 
SIM swaps and mobile malware, are becoming more common and can discourage users from making
payments through their mobile devices.
 Applications of M-commerce
 Mobile Banking: Using a mobile website or application to perform all your banking
functions. It is one step ahead of online banking and has become commonplace these
days. For example, in Nigeria, the majority of banking transactions happen on mobile
phones.
 Mobile Ticketing and Booking: Making bookings and receiving your tickets on the
mobile. The digital ticket or boarding pass is sent directly to your phone after you
make the payment from it. Even in India now IRTC and other services provide m-
ticketing services.
 E-bills: This includes mobile vouchers, mobile coupons to be redeemed and even
loyalty points or cards system.
 Auctions: Online auctions having now been developed to be made available via
mobile phones as well.
 Stock Market Reports and even stock market trading over mobile applications.
 Difference between e-commerce and m-commerce
BASIS FOR COMPARISON E-COMMERCE
Meaning Any kind of commercial
transaction that is concluded,
over the internet using
electronic system is known as
e-commerce.
Which device is used? Computers and Laptops
Developed In 1970's
What is it? Superset
Ease of carrying device No
Use of internet Mandatory
Reach Narrow i.e. it is available only Broad due to its portability.
in those places where there is
internet along with electricity.
M-COMMERCE
M-commerce refers to the
commercial activities which
are transacted with the help of
wireless computing devices
such as cell phone or laptops.
Mobiles, tablets, PDA's, iPad
etc.
In 1990's
Subset
Yes
Not mandatory
 E-Commerce Trade Cycle
•A trade cycle is the series of exchanges, between a customer and supplier, that take place when a commercial
exchange is executed. A general trade cycle consists of:
•Pre-Sales: Finding a supplier and agreeing the terms.
•Execution: Selecting goods and taking delivery.
•Settlement: Invoice (if any) and payment.
•After-Sales: Following up complaints or providing maintenance.
•For business-to-business transactions the trade cycle typically involves the provision of credit with execution
preceding settlement whereas in consumer-to-business these two steps are typically co-incident. The nature of the
trade cycle can indicate the e-Commerce technology most suited to the exchange.
•Commercial transactions that are repeated on a regular basis, such as supermarkets replenishing their shelves, is one
category of trade cycle.
 Electronic Markets
Electronic Markets: Description and Examples
• E-commerce involves linking consumers to e-marketplaces besides supporting
hierarchical transactions within organizations electronically
• Electronic Market Description – Foundation of e-commerce – Electronic marketplace(e-
market system)
• An inter-organizational information system operated by intermediary – Facilitate
transactions – Support the three phases of activities consisted in business process models
• Pre-purchase determination
• Purchase consummation • Post-purchase interaction
• Customers can buy directly from growers with flowers
• Elimination of intermediaries between growers and customers
• Price is lower – Clothing – similar to cut-flower examples – Automobiles • More
options for shoppers
• Consumers can buy a new car, insure it & take delivery without a dealership – Music –
Cdnow, a cyberstore – Books – Amazon.com
• More current web advertising than print ones.
 Internet Commerce
 Internet Commerce is the use of the Internet for all phases of creating and completing business transactions.
Various surveys suggest that the amount of business conducted online will increase ten-fold over the next
few years, from around $500 million in 1996 to over $6 billion in 2000. However, this still represents less
than 10 per cent of the business conducted by mail order.
 In our view too much focus of electronic commerce to date has been put on carrying out the final
transactional phases - the ordering and payment. While such a perspective is all right when there are
established supply chains for regular and routine purposes, this overlooks the wider perspective. It is often
said, that the formal placement of an order is preceded by as many as 30 previous information exchanges.
 Thus, in its broadest sense we view Internet Commerce as also including:
•The full sales and marketing cycle - for example, by analysing online feedback to ascertain customer's needs
•Identifying new markets - through exposure to a global audience through the World Wide Web
•Developing ongoing customer relationships - achieving loyalty through ongoing email interaction
•Assisting potential customers with their purchasing decision - for example by guiding them through
product choices in an intelligent way
•Providing round-the-clock points of sale - making it easy for buyers to order online, irrespective of location
•Supply Chain Management - supporting those in the supply chain, such as dealers and distributors, through
online interaction
•Ongoing Customer Support - providing extensive after-sales support to customers by online methods; thus
increasing satisfaction, deepening the customer relationship and closing the selling loop through repeat and
ongoing purchases.
 The Impact of Electronic Commerce 
1. Management Information Systems – Analysis, design and implementation of e-business systems within an
organization; issues of integration of front-end and back-end systems
2. Human Resource Management – Issues of on-line recruiting, home working and ‘Intrapreneurs’ works on a project by
project basis replacing permanent employees.
3. 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 increasingly knowledge based economy.
4. Economics –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
5. Production and Operations Management –The impact of on-line processing has led to reduced cycle times. It takes
seconds to deliver digitized products and services electronically; similarly the time for processing orders can be reduced by
more than 90 per cent from days to minutes. Production systems are integrated with finance marketing and other functional
systems as well as with business partners and customers.
6. Marketing – Issues of on-line advertising, marketing strategies and consumer behaviour and cultures. One of the areas
in which it impacts particularly is direct marketing. In the past this was mainly door-to door, home parties and mail order
using catalogues or leaflets.
7. Computer Sciences – Development of different network and computing technologies and languages to support e-
commerce and e-business, for example linking front and back office legacy systems with the ‘web based’ technology.
8. 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, legality of electronic contracted. 
 The Benefits of E-Commerce
1. Benefits of E-Commerce to Business
a) International Marketplace - What used to be a single physical marketplace located in a geographical area has now
become a borderless marketplace including national and international markets? By becoming e-commerce enabled,
businesses now have access to people all around the world. In effect all e-commerce businesses have become virtual
multinational corporations.
b) Operational Cost Savings - The cost of creating, processing, distributing, storing and retrieving paper-based
information has decreased.
c) Mass Customization - E-commerce has revolutionized the way consumers buy goods and services. The processing
allows for products and services to be customized to the customer’s requirements. In the past when Ford first started
making motor cars, customers could have any color so long as it was black. Now customers can configure a car
according to their specifications within minutes on-line via the www.ford.com website.
d) Lower Telecommunications Cost - The Internet is much cheaper than value-added networks (VANs) which were
based on leasing telephone lines for the sole use of the organization and its authorized partners. It is also cheaper to
send a fax or e-mail via the Internet than direct dialling.
e) Digitization of Products and Processes - Particularly in the case of software and music/video products, this can be
downloaded or e-mailed directly to customers via the Internet in digital or electronic format. f) No more 24-hour-time
Constraints - Businesses can be contacted by or contact customers or suppliers at any time.
 The Benefits of E-Commerce
2. Benefits of E-Commerce to Consumers
a) 24/7 Access - Enables customers to shop or conduct other transactions 24hours a day, all year round from almost
any location. For example - checking balances, making payments, obtaining travel and other information.
b) More Choices - Customers not only have a whole range of products that they can choose from and customize, but
also an international selection of suppliers.
c) Price Comparisons - Customers can ‘shop’ around the world and conduct comparisons either directly by visiting
different sites, or by visiting a single site where prices are aggregated from a number of providers and compared.
d) Improved Delivery Processes - This can range from the immediate delivery of digitized or electronic goods such as
software or audio-visual files by downloading via the Internet, to the on-line tracking of the progress ofpackages being
delivered by mail or courier.
e) An Environment of Competition - Where substantial discounts can be foundor value added, as different retailers
vie for customers. It also allows many individual customers to aggregate their orders together into a single order
presented to wholesalers or manufacturers and obtain a more competitive price.
 The Benefits of E-Commerce
3. Benefits of E-Commerce to Society 
a) Enables more Flexible Working Practices -This enhances the quality of life for a
whole host of people in society, enabling them to work from home. Not only is this
more convenient and provides happier and less stressful working environments, it also
potentially reduces environmental pollution as fewer people have to travel to work
regularly.
b) Connects People - Enables people in developing countries and rural areasto enjoy
and access products, services, information and other people which otherwise would not
be so easily available to them.
c) Facilitates Delivery of Public Services - For example, health services available
over the Internet (on-line consultation with doctors or nurses) filing taxes over the
Internet through the Inland Revenue website.