ELECTRONIC COMMERCE

Unit -1
 CONTEXT:
• Definition of E-Commerce.
• History of E-Commerce.
• Advantages and Disadvantages
of E-Commerce.
• Types of E-Commerce.
• E-Commerce Examples.
• Some of E-Commerce Websites
WHAT IS E-COMMERCE?
• E-commerce consists of the buying
and selling of products or services
over electronic systems such as
the Internet and other computer
networks.
• Electronic commerce commonly
known as e-commerce.
Introduction
• 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 Data Interchange:
Electronic Funds Transfer:
• EDI is the structured
transmission of data
between organizations
by electronic means. It
is used to transfer
electronic documents
or business data from
one computer system
to another computer
system.
• EFT is the electronic
exchange or transfer
of money from one
account to another.
Electronic Funds
Transfer (EFT)
• Electronic Funds Transfer (EFT) is the
process by which a user of one bank
can transfer money from their account
to another by way of payment. It is also
called a direct deposit since it directly
deposits money into the receiver’s
account without the need for any
physicality like documents and
cheques, and for its accessibility.
Types of EFT payments
• Direct deposit
• ATMs (Automated
Teller Machines)
• Credit/debit cards
• Pay-by-phone
systems
• Electronic cheque
(E-check)
History of E-Commerce
• 1969 — Two electrical engineering
students from Columbus, Ohio, launch
CompuServe, which becomes the
country’s first-ever commercial online
service.
• 1979 — English inventor Michael Aldrich
uses a transaction-processing computer
and a doctored television to create the
very first secure data transmission,
laying the groundwork for online
shopping.
History of E-Commerce
• 1982 — The first online marketplace,
Boston Computer Exchange, opens for
business.
• 1995 — Influential e-commerce
marketplaces Amazon and eBay launch.
Both companies complete one million
transactions by 1997.
• 1998 — E-commerce payment system
PayPal debuts, giving consumers a
trusted artery to handle both personal
and business-related financial
transactions.
History of E-Commerce
• 2000 — Google debuts Google AdWords,
giving e-commerce businesses the power to
advertise through the Google search tool.
• 2005 — Amazon launches Amazon Prime
membership.
• 2009 — Square debuts, allowing retailers to
accept debit and credit payments through an
app.
• 2014 — Apple introduces the mobile payment
and digital wallet tool Apple Pay
Advantages of E-commerce

1. Faster buying process

2. Store and product listing creation
3. Cost reduction
4. Affordable advertising and marketing
5. Flexibility for customers
6. No reach limitations
7. Product and price comparison
8. Faster response to buyer/market
demands
9. Several payment modes
1. Faster buying process

• Advantages of e-business include

helping one to choose from a wide
range of products and get the order
delivered too. Searching for an
item, seeing the description, adding
to cart – all steps happen in no
time at all. In the end, the buyer is
happy because he has the item
and didn’t have to travel far.
2. Store and product
listing creation
• A product listing is what the customer sees
when they search for an item. This is one
advantage in ecommerce meant for the seller.
This online business plus point is that you can
personalise your product listing after creating
them.
• Customising listings makes them attractive and
appealing. Here the seller has full control over
customisation, he can mention offers available,
discounts etc. Other advantages of e-business
product listing are that it is free to upload and
fast.
 3. Cost reduction
• One of the biggest advantages of
ecommerce to business that keep sellers
interested in online selling is cost
reduction. Many sellers have to pay lots to
maintain their physical store. They may
need to pay extra up front costs like rent,
repairs, store design, inventory etc. In
many cases, even after investing in
services, stock, maintenance and
workforce, sellers don’t receive desired
profits and ROI.
4. Affordable advertising
and marketing
• Sellers don’t have to spend a lot of
money to promote their items. The world
of ecommerce has several affordable,
quick ways to market online.
Ecommerce marketplaces are visual
channels – and sellers can really show
off their product. For example, Amazon
sellers can use Advertising tools to add
videos, infographics, good quality
resolution images.
5. Flexibility for customers

• An important advantage of
ecommerce to business is that
sellers can provide flexibility to
customers. One highlight is that the
product and services are ready
24x7. The result is that seller can
offer his item any place, any time.
6. Product and price
comparison
• In ecommerce, sellers can compare the
products using tools or on their own. This
gives them a good idea of product
alternatives available, the standard rates,
if a product need is unfulfilled.

Comparison is faster online and

covers many products - It helps to save
time when making this comparison, as all
details are available on the shopping
site. 
7. No reach limitations

• A seller with a physical store may only be able

to reach a certain number of buyers. They can
deliver to the customers’ homes but there can
be distance limitations. Several e-commerce
marketplaces have their own logistics and
delivery system.

Reaching out to more customers - Sellers

that need to expand their reach to find new
customers can benefit from this. This applies to
online-only sellers and those with a physical
store.
 8. Faster response to
buyer/market demands
• Every interaction is faster when you
begin selling online. Ecommerce
marketplaces offer you a streamlined
logistics or delivery system. What this
means is that the buyers order gets
delivered efficiently. Product returns
management is one more plus point that
can be handled quickly – you either
refund the payments or give a
replacement.
9. Several payment modes

• Buyers like personalisation – the same goes for

paying for their orders. Ecommerce
marketplaces permit multiple payment modes
that include UPI, cash on delivery, card on
delivery, net banking, EMIs on credit or debit
card and pay-later credit facility.

Cart recovery – This is one huge benefit or

ecommerce. Sometimes a buyer reaches the
checkout page but doesn’t complete the
purchase. Here, you can notify customers via
phone messages, email to finish buying.
Disadvantages of E-commerce

• Lack of Personal Touch: Some customers appreciate the

personal touch they offer when visiting a physical store by
interacting with the sales associates. Such personal touch is
especially essential for businesses that sell high-end products
as customers will want to buy the products and have an
excellent experience during the process.
• Lack of Tactile Experience: No matter how good a video is
made, customers still can’t feel and touch a product. Not to
mention, it’s never an easy task to deliver a brand experience
that could often be including the sense of touch, taste, smell,
and sound via the two-dimensionality of any screen.
• Product and Price Comparison: With online shopping,
customers can compare several products and find the least
price. This forces many businesses to compete on price and
reduce their profit margin, reducing the quality of products.
Disadvantages of E-commerce

• Need for Access to the Internet: This is obvious, but don’t

forget that the customers do need access to the Internet before
purchasing from any business! As many eCommerce platforms
have the features and functionalities which require a high-
speed Internet connection for an optimal consumer experience,
there’s a chance that companies are excluding visitors who
have slow internet connections.
• Credit Card Fraud: Credit card frauds are a natural and
growing problem for online businesses. It can lead to many
chargebacks, which result in the loss of penalties, revenue, and
a bad reputation.
• IT Security Issues: More and more organisations and
businesses have fallen prey to malicious hackers who have
stolen information of the customers from their databases. This
could have financial and legal implications, but it also reduces
the company’s trust.
Disadvantages of E-commerce
• All the Eggs in One Basket: E-Commerce
businesses rely solely or heavily on their websites.
Even just some minutes of downtime or technology
glitches could be resulting in a substantial revenue
loss and customer dissatisfaction.
• Complexity in Regulations, Taxation, and
Compliance: Suppose any online business sells to
its consumers in different territories. In that case,
they’ll have to stick to the regulations in their own
countries or states and their consumers’ places of
residence. This could be creating a lot of
complexities in accounting, taxation and compliance.
Types of E-commerce
B2B (Business-to-Business)
B2C (Business-to-Consumer)
C2B (Consumer-to-Business)
C2C (Consumer-to-Consumer)
B2G (Business-to- Government)
G2B (Government-to-Business)
G2C(Government –to- Citizen)
1) BUSINESS TO BUSINESS (B2B)

• Business-to-business (B2B), also

called B-to-B, is a form of transaction
between businesses, such as one
involving a manufacturer and
wholesaler, or a wholesaler and a
retailer. Business-to-business refers
to business that is conducted
between companies, rather than
between a company and individual
consumer. 
B2B
KEY Features (B2B)

• Business-to-business (B2B) is a transaction or

business conducted between one business and
another, such as a wholesaler and retailer.
• B2B transactions tend to happen in the supply
chain, where one company will purchase raw
materials from another to be used in the
manufacturing process.
• B2B transactions are also commonplace for
auto industry companies, as well as property
management, housekeeping, and industrial
cleanup companies.
 Examples(B2B)
• Many vehicle components are manufactured
independently, and auto manufacturers
purchase these parts to assemble automobiles.
Tires, batteries, electronics, hoses and door
locks, for example, are usually manufactured by
various companies and sold directly to
automobile manufacturers.
• Service providers also engage in
B2B transactions. Companies specializing in
property management, housekeeping, and
industrial cleanup, for example, often sell these
services exclusively to other businesses, rather
than individual consumers.
 2) BUSINESS TO CONSUMER
(B2C)
• The term business-to-consumer (B2C) refers to
the process of selling products and services
directly between a business and consumers
who are the end-users of its products or
services. Most companies that sell directly to
consumers can be referred to as B2C
companies.
B2C
KEY FEATURES (B2C)

• Business-to-consumer refers to the

process of businesses selling products
and services directly to consumers, with
no middle person.
• B2C typically refers to online retailers
who sell products and services to
consumers through the internet.
• Online B2C became a threat to
traditional retailers, who profited from
adding a markup to the price.
B2C - Models

1. Direct sellers. This is the most common model in which

people buy goods from online retailers. These may
include manufacturers or small businesses or simply
online versions of department stores that sell products
from different manufacturers. 
2. Online intermediaries. These are liaisons or go-
betweens who don't actually own products or services
that put buyers and sellers together. Sites like Expedia,
trivago, and Etsy fall into this category.
3. Advertising-based B2C. This model uses free content
to get visitors to a website. Those visitors, in turn, come
across digital or online ads. Large volumes of web traffic
are used to sell advertising, which sells goods and
services. One example is media sites like Huff Post, a
high-traffic site that mixes advertising with its native
content. 
B2C - Models
4. Community-based. Sites like Meta (formerly
Facebook), which build online communities
based on shared interests, help marketers and
advertisers promote their products directly to
consumers. Websites typically target ads based
on users' demographics and geographical
location.
5. Fee-based. Direct-to-consumer sites like Netflix
charge a fee so consumers can access their
content. The site may also offer free but limited
content while charging for most of it. The New
York Times and other large newspapers often
use a fee-based B2C business model. 
Examples : B2C
• One example of a major B2C
company today is Shopify, which
has developed a platform for small
retailers to sell their products and
reach a broader audience online.
• Disney+, which charges a
subscription to stream their video-
on-demand content.
 3) CONSUMER TO BUSINESS
(C2B)
• C2B stands for Consumer-to-Business, and is
used to describe a business model where
consumers deliver value to a business.
• The C2B strategy gets consumers to provide
services or products that appeal to businesses
• In recent years, the freelance work industry has
exploded. Freelancers can provide everything
from a press release to an entire logo for clients
who need assistance in these areas but are
unable or unwilling to hire full-time employees.
• Examples of C2B models include referral
programs, paid testimonials, or data sharing.
C2B
Benefits : C2B
• Flexibility: Businesses and sellers can
define their own revenue parameters, such
as the duration of services, how often
payment gets collected or product supply
dates. This offers more scheduling
flexibility for freelancers to enjoy while
providing their services.
• Higher earning potential: Sellers have
unlimited earning potential; they can work
as much as they want and provide their
services and product to as many
businesses as they choose.
Benefits : C2B
• Wider reach: Businesses have the opportunity to
prioritize how they hire sellers, which gives them
the ability to hire from specific regions, such as
where the average income or cost of living is
lower, thereby reducing their costs.
• Variety of work: Sellers have the opportunity to
gain valuable work experience with different
businesses across multiple projects, and they have
the opportunity to be paid well for their services.
• Independence: Consumers can provide their
products or services to a business without having
to create a business or go into business for
themselves.
Examples : C2B
• A food blogger who shares an affiliate link to a
kitchen company’s cooking products on their blog.
• A tech blogger who displays a company's service
ads to their audience in exchange for a cut of the
ad revenue.
• Social media users who fill out surveys on Survey
Junkie or promote products and services.
• Large e-commerce websites or sellers who pay or
otherwise reward consumers for reviewing their
products or when they share a review on their
personal social media.
4) CONSUMER TO CONSUMER
(C2C)
• It facilitates the online transaction of goods or
services between two people.
• Customer to customer (C2C) is a business
model whereby customers can trade with each
other, typically in an online environment. Two
implementations of C2C markets are auctions
and classified advertisements. 
C2C
KEY Features

• Customer to customer (C2C) is a

business model that enables customers
to trade with each other, frequently in an
online environment. 
• C2C businesses are a type of business
model that emerged with e-commerce
technology and the sharing economy.
• Online C2C company sites include
Craigslist, Etsy, and eBay, which sell
products or services through a classified
or auction system.
 Business To Government
(B2G)

• B2G model is a variant of B2B

model. Such websites are used by
governments to trade and
exchange information with various
business organizations. Such
websites are accredited by the
government and provide a medium
to businesses to submit application
forms to the government.
B2G
Government To Business
(G2B)
• Governments use B2G model
websites to approach business
organizations. Such websites
support auctions, tenders, and
application submission
functionalities.
G2B
 Government To Citizen
(G2C)
• Governments use G2C model websites
to approach citizen in general. Such
websites support auctions of vehicles,
machinery, or any other material. Such
website also provides services like
registration for birth, marriage or death
certificates. The main objective of G2C
websites is to reduce the average time
for fulfilling citizen’s requests for various
government services
G2C
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.
Nature of E-Commerce
• Anytime, Anywhere, Anyone
• Information Density
• Digital Convergence
• Product Promotion
• Redefining Organizations
• Direct savings
• No trail of Paper documentation
Challenges and Barriers in
E-Commerce Environment
• Customers’ Exploding Expectations
  It is very difficult to meet customer expectations,
competing with them and fulfilling the ever-evolving
customer demands is a huge challenge for retailers
today.
• Online Identity Verification
When a visitor registers on an eCommerce website, the
information they enter may not be genuine – therefore you
cannot know if they are genuinely interested in purchasing. For
example, cash-on-delivery purchases made with a fake phone
number and address can result in massive losses in revenue. 

•
Challenges and Barriers in
E-Commerce Environment
• Cyber security
Cyber attacks can compromise the security of
your e Commerce website by infecting it with
viruses and, what’s even worse, they may
compromise the security of your registered
customers’ data.
• Shopping Cart Abandonment
One of the biggest problems eCommerce
businesses are facing – no matter their size – is
shopping cart abandonment. 
Stats show that online shoppers abandon their
shopping carts 68% of the time and some stores
can see abandonment rates as high as 80%.
Challenges and Barriers in

E-Commerce Environment
Product Returns And Refunds
• Over 60% of online shoppers look at a
shop’s return policy before making a
purchase. 
• 48% of customers would shop more if
stores offered less complicated returns
and an inconvenient returns policy
deters 80% customers.
• Furthermore, 89% of online shoppers
have made a return at one point during
their shopping experience.
Challenges and Barriers in

E-Commerce Environment
• Competition From Manufacturers And
Retailers
• Manufacturers and retailers that online stores buy
products from in bulk eventually begin selling their
goods directly to customers.
• Digital Marketing Is Getting More
Expensive
• Digital marketing has long been a more affordable
form of advertising, compared to traditional
marketing. 
• The cost of digital marketing has
increased 12% on average across all channels,
meaning that every dollar eCommerce managers
invest may have less impact now than it had in
the past.
Ecommerce in India
• E-Commerce is a type of virtual industry where
the buying and selling of products and services
is conducted over electronic systems such as
the internet and other computer networks.
• Earlier, there were no such concepts for the
retailers or for the customers to play with. They
were restricted to their physical stores for the
purpose of buying and selling but now there
are many online websites
Ecommerce in India
• In India the users of computers and internet
have increased drastically from 1995 to 2022.
Now the entire business scenario has changed
as everything has become online now.
There were 658.0 million internet users in India
in January 2022.
E-commerce has transformed the way business is
done in India. The Indian E-commerce market is
expected to grow to US$ 188 billion by 2025
from US$ 46.2 billion as of 2020. By 2030, it is
expected to reach US$ 350 billion. In 2022, the
Indian e-commerce market is predicted to
increase by 21.5%, reaching US$ 74.8 billion.
Transition to E-Commerce in
India

• The potential for e-commerce is enormous

in India, owing to the rapid growth of the
number of internet users.
• The huge savings in time and money by
both buyers and sellers is the principal
advantage. 
• The pandemic has expanded online shops
to include more groceries and household
items and forced an increase in virtual
traffic and in return, physical stores have
suffered. 
Indian Readiness for Ecommerce

• India is the second fastest growing economy in

the world. In the last few years, Indian has
developed radically. 
•  In India, the year 1990 marked the year of
science and technological advancement in the
country. In the last two decades, the country
has come a long way.
• Computer and internet have become available
in almost every home. This has created a
market for e-commerce in India.
Reasons Which Make India A
Suitable Market For E-commerce

1.The mindset of consumer has

changed
2.Internet friendly users
3.Entry of big names in the Indian e-
commerce market
4.The success of the some of the
sectors in the e-commerce market.
E Transition Challenges
To Corporate
• Poor knowledge and Awareness
• Cash on Delivery
• Online Security
• Logistic and shipment services
• Tax Structure
• Fear Factor
• Touch and Feel Factor
Queries ?