E-COMMERCE

FUNDAMENTALS
Module 3

Introduction to the fundamentals of

e-commerce
Learning Objectives

• Introduction to Electronic Commerce (EC)

• Discover the main EC Business Models
• Understand the EC Revenue Models
• Explore EC Technology & Platforms
• Walkthrough B2B & B2C Business Models
• Explore retailing in EC
• Multi-channel EC
Introduction to Electronic
Commerce
What is Electronic Commerce?

• Electronic Commerce (EC)

The process of buying, selling, or exchanging products, services, or information via
computer

• E-business
A broader definition of EC that includes not just the buying and selling of goods and
services, but also servicing customers, collaborating with business partners, and
conducting electronic transactions within an organization

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E-commerce Business Types

• Business-to-business (B2B)
E-commerce model in which all of the participants are businesses or other organizations

• Business-to-consumer (B2C)
E-commerce model in which businesses sell to individual shoppers

• Consumer-to-consumer(C2C)
E-commerce model in which consumers sell directly to other consumers

• Social E-commerce
E-commerce that is enabled by social networks and online social relationships

• M-commerce
E-commerce model which involves the use of wireless digital devices to enable online transactions

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 Unique Characteristics of E-Commerce

Slide 2-6
E-Commerce Business
Models
Business Model

• A plan for the successful operation of a business, identifying sources of revenue, the
intended customer base, products, and details of financing.
• A business model is a set of planned activities designed to result in a profit in a
marketplace.
• E-commerce business model aims to use and leverage the unique qualities of the
Internet and the WWW.

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Eight Key Elements of a Business Model

• If you hope to develop a successful business model in any arena you must make sure that the model effectively
addresses the eight elements listed below

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Key Elements of an EC Business Model

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,
 E-commerce Revenue
Models

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Revenue Model

• Describes how a firm will earn revenue, generate profits, and produce a superior return
on invested capital than alternative investments.
• Many revenue models exist but most companies rely on one or some combination of the
following
• Advertising model
• Subscription model
• Transaction fee model
• Sales model
• Affiliate model

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Major EC
Revenue Models

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E-commerce Technology
 MAJOR BUSINES-TO-
CONSUMER (B2C)
BUSINESS MODELS

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MAJOR BUSINES-TO-CONSUMER (B2C) BUSINESS MODELS

• Online businesses seek to reach individual consumers. This is the most well-known and
familiar type of e-commerce
• E-tailer
• Community provider (social network)
• Content provider
• Portal
• Transaction broker
• Market creator
• Service provider

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 MAJOR BUSINESS-TO-
BUSINESS (B2B)
BUSINESS MODELS

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MAJOR BUSINESS-TO-BUSINESS (B2B) BUSINESS MODELS

• E-Commerce in which businesses sell to other businesses.

• More than 10 times the size of B2C e-commerce
• E-distributor
• E-procurement
• Exchange
• Industry consortium
• Private industrial network

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Retailing in Electronic
Commerce
The Evolution of Retail

Source: Aliresearch
Internet Marketing and Electronic Retailing

Overview Of Electronic Retailing

A retailer is a sales intermediary, a seller that operates between manufacturers and customers
• Electronic Retailing (E-tailing)
Retailing conducted online, over the Internet called as e-tailing
• E-tailers
Retailers who sell over the Internet  B2C: B2B

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Internet Marketing and Electronic Retailing
What Sells Well On The Internet
Travel
Entertainment
Computer hardware and software
Apparel and clothing
Consumer electronics
Jewelry
Office supplies
Cars
Sport and fitness goods
Services
Books and music
Food and drugs
Toys and hobbies
Pet supplies
Health and beauty
Others

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Internet Marketing and Electronic Retailing

Characteristics Of Successful E-tailing

Following characteristics are expected to facilitate higher sales volume:
• High brand recognition  Dell, Sony
• A guarantee provided by highly reliable or well-known vendors  Dell
• Digitized format  software, music or videos
• Relatively inexpensive items  office suppliers, vitamins
• Frequently purchased items  groceries, prescriptions drugs
• Commodities with standard specifications  books, CDs, airline tickets
• Well-known packaged items that cannot ne opened even in a traditional store  food, chocolates
vitamins

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Multi-channel E-commerce
Discussion: self-hosted vs marketplace e-commerce
Thank You