• View

  • Download

Embed Size (px)



Text of e-commerce

Electronic Commerce

Uma Lakshmi K

Electronic CommerceDistributing, buying, selling, marketing and Servicing of products or services over electronic systems such as computer and other networks. It is an electronic business application aimed at commercial transactions.

Electronic CommerceThe seamless application of information and communication technology from its point of origin to its end point along the entire value chain of business processes conducted electronically and designed to enable the accomplishment of a business goal

Information Era Dramatic Roles 1955 1974 Electronic Data Processing (EDP) 1975-1994 1995-2014

MIS & Strategic Information Era Internet

backdrop of E-Commerce Internet Late 1800s;Emergence of large business organizations 1950 s; use of computers in Business 1960 s; information exchange on punched cards and magnetic

tapes. But only large trading corporations could afford it as the translating formats were specific to companies. Majorly freight and shipping companies

Late 1969 s ARPANET,US Defence dept

control weapon systems and transfer research files 1970 s EDI; the Senior of E-Commerce

backdrop of E-Commerce Internet

1979; e-mail on USENET by students of Duke and North Carolina University 1989; NSF (National Science Foundation) permitted two commercial e-mail services, MCI-mail and CompuServe

1991 1994; privatization of Internet, with the new structure based on four Network Access Points (NAP), each operated by a separate company called Network Access Providers., who sell network access rights directly to large customers and indirectly to small firms through ISPs (Internet Service Providers)

Potential of Internet not realized initially; within 30 years it has become one of the most amazing technologies and social accomplishment of 20th century. Every year apart from information, billions of dollars change hands over internet.

backdrop of E-Commerce World Wide Web

1990; Tim Berner Lee at CERN (Conseil Europeen pour la Recherche Nucleaire), the European Laboratory for Particle Physics in Geneva, Switzerland, proposed HTML to enable exchange of information among high-energy physics community.

1991; WWW publicly available from CERN. 1993; 50 web servers, GUI web browser for X Windows and Macintosh available.

1993; Marc Andreessen at NCSA (National Centre for Super computing Applications) developed web browser for X Windows called Mosaic and 1994 he started his own company later known as Netscape Communications .

1994; World Wide Web Organization was announced by CERN and MIT, which later was known as W3C (World Wide Web Consortium) , to guide technical developments and standards for the evolution of the web.

1994 s Amazon.com ; the pioneer of E-Commerce 1995; Netscape navigator (Mozilla) 2000 s Dot-com burst

E-Commerce now is more of a norm than exception

E-Commerce some milestones 1992 1 million hosts 1993 50 web servers 1993- InterNic created to handle domain name

registration 1996- 12.8 million hosts 2,12,155 hosts 25 million users 90% users are from USA 1997- 1.3 million domain names 2007- 1350 million users

Dimensions of E-Commerce Business Technology Society

- E-Commerce has challenged the concept of privacy, intellectual property, national Sovereignty, and governance.

E-Commerce Technology mediated exchanges between

parties (Individuals & Organizations or within organizations) electronically facilitated.

E-Business Digital enabling of transactions and processes

in a firm involving Information Systems.

Testimonials from Amazon 1994 - Jeff Bejos , Sr.VP at a wall street investment Bank

read that Internet is likely to grow at 2300% per year. 1996- 3 million titles of Books No touch and feel required by customers. December, 1999 Person of the year on Time Magazine. $113.00 / share Jan, 2001 - $545 million net loss in the last quarter itself. 1300 employees laid off. September , 2008 Top Web billionaire of the world

Characteristics of e-commerce Exchange of Digitized Information between

Parties communication, coordination for the transmission of goods/ services It is technology enabled (web browsers, ATM interfaces) Technology mediated transactions more than human contact. Intra and inter organizational activities that exchange in Business environment.

Characteristics of e-commerce Universal Standards shared by all nations. Information density with technology reducing

the cost of Information and raising the quality of information. Richness of the data: Text, graphic, Audio, and Video Dynamic (continuous change) Customization and interactivity; sense and respond listening to customers in a new way.

Advantages of E-CommerceComplements traditional business 24 X 7 operations Global reach Relatively less cost of acquiring, serving, and retaining customers An extended enterprise including suppliers, retailers, and customers is easy. Disintermediation:Reduced intermediaries between customer and supplier Improved customer service(reduced lead time)

Advantages of E-Commerce A technology based customer interface with GUI

and interactivity which does not need unnecessary follow ups Interaction controlled by customer.(Any time interaction can be closed) Easy to observe and track customer/ consumer behavior Network economics: In Information centric industries gain more mileage. Financial Institutions can reduce the no. of branches due to increasing online transactions. Friction free commerce

Disadvantages of E-commerce Perishable foods, highly expensive jewellery,

antiques may be difficult to inspect from remote location. With emerging and dynamic technology like ECommerce, it is difficult to calculate ROI Micro transactions may include more transaction charges than product price. Difficulty in integrating online and off-line processes. Recruitment and retention of technical people. Cultural and legal obstacles.(cyber laws not sufficient enough and security concerns)

Disciplines concerned with EcommerceManagement science Computer science

Economics Sociology

Information System Marketing

Finance & Accounting

E-Commerce I (1995 onwards)



E-Commerce II (2001

Technology driven Revenue growth emphasis Venture capital financing Ungoverned Entrepreneurial Disintermediate Perfect markets Pure online strategy First mover advantage

Business Driven Earning and profit

emphasis Traditional financing Strong regulation and governance Large traditional firms Strengthening intermediation Imperfect with markets, brands, network effect Mix of click and brick Strategic follower strategy

Fact file Nearly $125 billions of venture capital went

into thousands of dot-coms by 1999. Only 15% of the dot-coms since 1995,

survived after 2000 B2C sales growing by 45 50% per year.

Network effect

Goes by Metcalfe s law which postulates that the value of a network grows by the square of number of participants.

Challenges for e-Commerce One world, the web world may expect one

price ; entrepreneurs must find ways to show differentiation in product and service. Nearly 65% of transactions stop at shopping cart level because of customer uncertainties. Constantly changing prices not realistic. Security concerns among people Internet yet to reach third world beyond US and other developing countries.

Categories of E-CommerceB B CB2B



C2C / (P2P)

B2B Business-to-business (B2B) describes commerce

transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. The volume of B2B (Business-to-Business) transactions is much higher than the volume of B2C transactions

B2BB2B Web sites can be sorted into: Company Web sites, since the target audience for many company Web sites is other companies and their employees. Company sites can be thought of as round-the-clock mini-trade exhibits. Sometimes a company Web site serves as the entrance to an exclusive extranet available only to customers or registered site users. Some company Web sites sell directly from the site, effectively e-tailing to other businesses. Product supply and procurement exchanges, where a company purchasing agent can shop for supplies from vendors, request proposals, and, in some cases, bid to make a purchase at a desired price. Sometimes referred to as e-procurement sites, some serve a range of industries and others focus on a niche market.

B2B (contd..) Specialized or vertical industry portals which provide a "subWeb" of information, product listings, discussion groups, and other features. These vertical portal sites have a broader purpose than the procurement sites (although they may also support buying and selling). Brokering sites that act as an intermediary between someone wanting a product or service and potential providers. Equipment leasing is an example.

B2B Commerce

Information sites (sometimes known as infomediary ), which provide information about a particular industry for its companies and their employees. These include specialized search sites and trade and industry standards organization sites. Many B2B sites may seem to fall into more than one of these groups. Models for B2B sites are still evolving. Another type of B2B enterprise is software for building B2B Web sites, including site building tools and templates, database, and methodologies as well as transaction software.

B2B Business-to-business (B2B) e-commerce is significantly different from business-to-consumer (B2C) e-comme