Understanding e-commerce Chapter One Understanding e-commerce

Learning objectives Evolution of e-commerce Role of technology in e-commerce Internet and e-commerce

History of e-commerce History of ecommerce dates back to the year (1991) when the internet was made available for commercial purposes web sites were allowed to use internet for business transactions Do business electronically from virtually anywhere in the world that has a computer. In 2004 alone, e-commerce generated well over $100 billion in retail business and over $1.5 trillion business-to-business traffic. At first, the term ecommerce meant the process of execution of commercial transactions electronically leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) were used

CONT’D Factors that impacted e-commerce Security wrong usage of credit information Privacy security protocol such as HTTP

The Dot Com era "brick and mortar" retailers recognized the advantages of electronic commerce first generation e-commerce portal In spite of ‘dotcom’ burst, the ecommerce sales continued to grow in the next few years customers prefer e-commerce over tele orders Today’s Internet promotes individualism. Case: Amazon.com: synonymous with e-commerce Case: Dell: An evolutionary e-commerce

What is e-commerce E-commerce is a short version of the term Electronic Commerce transactions related to online buying and selling of products or services done using electronic systems such as the Internet and other computer networks penetration and spread of the internet has fuelled e-commerce Examples os e-commerce are electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems definition of e-commerce in modern the modern times implies that it typically uses the World Wide Web at least at any point in the transaction's lifecycle Online retailers are sometimes known as e-tailers online retail is sometimes known as e-tail

Types of e-commerce B2B: E-commerce that is conducted between businesses is referred to as Business-to-business (1) open to the entire public or (2) limited to a group of businesses who have been part of the specific group business-to-consumer (B2C), business-to-government (B2G) All the forms of e-commerce include following steps. i) account acquisition, ii) product discovery through search and browse, iii) price negotiation, iv) payment, and v) product delivery. In some cases, dispute resolution and customer services may also exist

Changing times in e-commerce Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). Automated Teller Machines (ATMs) growth and acceptance of credit cards, and telephone banking became part of e-commerce Broadband connections to homes is fulfilling the ultimate mission of e- commerce. E-mail is now the very connectivity of e-commerce. Bar code scanning is on the way out, replaced by sophisticated biometric technology. Legal downloading of music, video, and other digital products via the Web is increasing. Big businesses, as well as small- and medium-sized firms, can afford to develop a Web presence quickly, reliably, and at an affordable cost. E-commerce has gone international.

E-commerce components Important component of e-commerce based firm is the website website should have technology that will make it easier for its customers to navigate site should offer every single feature necessary fully-functional and sustainable ecommerce web site stable server for hosting provide customer specific services technology partners who constantly upgrade the features as well as technology help business partners such as logistics partners and suppliers to share and exchange business data Alternatively SaaS can be used for running these services (reduce cost)

E-commerce Versus E-business Selling goods and services on the retail level with anyone, anywhere, via the Internet Greater efficiency and effective exchange of goods and services Exchange based upon transaction A block of information exchange between the merchant and its customers via the corporate Web site www.amazon.com E-business Connecting critical business systems and constituencies directly via the Internet

E-commerce and Web 2.0 web 2.0 and collaborate collaboration becomes a mutual touch point for all the stakeholders aggregating information about people, products and services reduces time spent searching resources for information, eliminates redundant data increased relevance, delivering key information to places where it can be used effectively Digital Convergence - digital devices communicating with one another Anytime, anywhere, anyone - e-commerce is available to anyone (24/7) Demand for customized products and services - mass customization puts pressure on firms to handle customized requests on a mass-market scale

Business-to-Government (B2G) The government market is strikingly similar to B2B. Huge potential for savings in $1.8 trillion federal and $1 trillion state and local expenditures Changing the status quo in government is not so easy Changes to employee tasks and job restructuring often create resistance Tax savings potential is not easily recognized Committing to technology means constant need for upgrades and additional costs

E-commerce Business Models Storefront Model Click-and-Mortar Model Built to Order Merchant Model Service Provider Model Subscription-based Access Model Prepaid Access Model Broker Model Advertiser Model Portal Site Model Free Access Model Virtual Mall Model Virtual Community Model Infomediary Model

Summary Electronic commerce (EC) is the ability to deliver products, services, information, or payments via networks such as the Internet and the World Wide Web. Electronic business connects critical business systems directly to key constituents The rise of specialized Web sites and Web logs (blogs) generated opportunities to read and write on a vast array of topics Several drivers promote EC: digital convergence Advantages of EC