(THE SCOPE OF

INTRODUCTIO ELECTRONIC
COMMERCE,
DEFINITION OF

N ELECTRONIC
COMMERCE,
ELECTRONIC E-

TO COMMERCE AND
THE TRADE CYCLE,
ELECTRONIC

E-COMMERCE MARKETS,
ELECTRONIC DATA
INTERCHANGE,
(EXPLORING THE DIGITAL MARKETPLACE)
INTERNET
COMMERCE, E-
COMMERCE IN
PERSPECTIVE.)
The Scope of Electronic
Commerce
•Definition: E-commerce refers to the buying and selling of goods and
services over the internet and other electronic networks.
E-commerce, short for electronic commerce, refers to the buying and selling
of goods and services over the internet or through other electronic means. It
involves online transactions, electronic data interchange (EDI), electronic
funds transfer (EFT), and other technologies to facilitate and support these
activities.
E-commerce encompasses a wide range of business activities, including
online retail stores, digital marketplaces, online auctions, and business-to-
business (B2B) transactions. It allows businesses and consumers to conduct
transactions and exchange information without the need for physical
presence.
Key components of e-commerce include online shopping, electronic
payments, online banking, and various forms of online communication and
collaboration. E-commerce has become an integral part of the global
economy, enabling businesses to reach a wider audience, streamline
processes, and provide convenient and accessible ways for consumers to
purchase goods and services.
Definition of Electronic Commerce

Key components: Buyers, sellers, digital

platforms, electronic transactions.
Types of E-Commerce: Business-to-
consumer (B2C), business-to-business
(B2B), consumer-to-consumer (C2C).
Models: Direct sales, marketplaces,
subscription services, affiliate marketing.
 Key Components of
e-commerce
Buyers: Refers to individuals or entities that purchase goods or services
through online platforms. Buyers are an essential component of the e-
commerce ecosystem, and understanding their preferences and behaviors is
crucial for the success of online businesses.
Sellers: Entities or individuals offering products or services for sale on
digital platforms. Sellers can include businesses of all sizes, from small
entrepreneurs to large corporations, and play a vital role in the supply chain
of e-commerce.
Digital Platforms: Online spaces or websites where buying and selling
transactions take place. Examples include e-commerce websites, mobile
apps, and other online marketplaces. Digital platforms provide the
infrastructure for online interactions between buyers and sellers.
Electronic Transactions: The process of conducting financial transactions
electronically, often facilitated by online payment systems. This component
ensures secure and efficient exchange of funds between buyers and sellers
in the digital realm.
Types of E-Commerce
Business-to-Consumer (B2C): Involves transactions
between businesses and individual consumers.
Examples include online retail platforms where
businesses sell products directly to end consumers.

Example: Amazon
Amazon is a prominent B2C e-commerce platform. It connects businesses
(sellers) with individual consumers. Customers can browse a vast product
catalog, make purchases, and have items delivered directly to their doorstep.
Amazon's B2C model involves a wide range of products, from electronics to
books, clothing, and more.
Types of E-Commerce
Business-to-Business (B2B): Involves transactions between two
or more businesses. This can include wholesale transactions,
partnerships, or collaborations between businesses operating in
the digital space.

Example: Alibaba
Alibaba is a leading B2B e-commerce platform, connecting businesses with
other businesses. It facilitates wholesale transactions, allowing manufacturers,
suppliers, and distributors to buy and sell products in bulk. Businesses can
negotiate terms, place orders in large quantities, and establish partnerships
through the Alibaba platform.
Types of E-Commerce
Consumer-to-Consumer (C2C): Encompasses transactions where
individual consumers sell products or services directly to other
consumers. Online auction sites and peer-to-peer marketplaces are
common examples of C2C e-commerce.
Example : eBay
eBay is a popular C2C e-commerce platform where individual consumers can buy
and sell products directly to each other. Users can list items for auction or set a
fixed price, and other consumers bid or purchase the items. eBay acts as an
intermediary, providing a platform for individuals to engage in buying and selling
with a wide variety of products, including both new and used items.
Models of E-Commerce
Direct Sales: Involves a business selling its products or services
directly to the end consumer through its online platform. Customers
browse the product catalog, make a selection, and complete the
purchase on the company's website.
Marketplaces: Platforms that connect multiple sellers with a large
number of potential buyers. Marketplaces facilitate transactions
between buyers and sellers, often providing a centralized location for
a wide range of products or services.
Subscription Services: Business models where customers pay a
recurring fee to access products or services regularly. Subscription-
based e-commerce often provides convenience and continuity for
consumers and a predictable revenue stream for businesses.
Affiliate Marketing: A performance-based marketing strategy where
businesses reward affiliates for driving traffic or sales to their website
through the affiliate's marketing efforts. Affiliates earn a commission
for each sale or lead generated through their promotional activities.
Impact on traditional trade:
DISRUPTION OF BRICK-AND-MORTAR STORES

•Shift in Consumer Behavior: The rise of e-commerce has led to

a significant shift in consumer behavior, with more people opting
for online shopping rather than traditional brick-and-mortar stores.

•Store Closures: Traditional retailers face the challenge of

declining foot traffic, leading to store closures and financial
challenges for many brick-and-mortar businesses.

•Adaptation and Integration: To survive, traditional retailers are

forced to adapt and integrate e-commerce into their business
models, creating an omnichannel approach to meet changing
consumer preferences.
Impact on traditional trade
NEW COMPETITION

•Global Market Access: E-commerce allows businesses

to reach a global audience, introducing new competitors
from different geographic locations. Local businesses
now compete not just with neighboring stores but also
with online retailers worldwide.
•Marketplace Platforms: The emergence of online
marketplaces has intensified competition, as smaller
businesses now compete on the same platforms as larger,
established companies.
Impact on traditional trade
GLOBALIZATION
•Borderless Transactions: E-commerce facilitates cross-border
transactions, enabling businesses to operate globally without the
need for a physical presence in every market. This has increased
competition but also provides new opportunities for expansion.

•Diverse Product Availability: Consumers can access a broader

range of products from around the world, impacting the demand
for locally produced goods and changing consumption patterns.

•Supply Chain Changes: E-commerce often involves complex

global supply chains, affecting the distribution networks of
traditional retailers and influencing how products move from
manufacturers to end consumers.
 OPPORTUNITIES FOR BUSINESSES
INCREASED SALES
Global Reach: E-commerce allows businesses to tap into a global customer base, reaching
markets beyond geographical limitations.
Cross-Selling and Upselling: Online platforms enable businesses to implement effective cross-
selling and upselling strategies, thereby increasing the average transaction value.

Reduced Costs
Lower Overhead: Operating an e-commerce business often involves lower overhead costs
compared to brick-and-mortar stores, as there's no need for physical storefronts and associated
expenses.
Inventory Optimization: E-commerce facilitates better inventory management, reducing holding
costs and minimizing the risk of overstocking or stockouts.

Improved Efficiency,
Automation: E-commerce platforms allow for the automation of various processes, such as order
processing, payment handling, and inventory management, leading to increased operational
efficiency.
Data Analytics: Access to data analytics tools enables businesses to gain insights into customer
behavior, preferences, and market trends, aiding in more informed decision-making.
 OPPORTUNITIES FOR BUSINESSES

MARKET EXPANSION

•New Customer Segments: E-commerce provides

opportunities to target and attract new customer
segments that may not be accessible through
traditional retail channels.
•Diversification: Businesses can diversify their
product or service offerings to cater to different
markets and consumer needs, expanding their overall
market presence.