Ashima Wadhwa Exploring E-Commerce Basics

What is e-Commerce and e-business? Electronic commerce (EC, or e- commerce) describes the process of buying,selling, transferring, or exchanging of products, services, and/or information via computer networks, including the Internet. Electronic commerce (EC, or e- commerce) describes the process of buying,selling, transferring, or exchanging of products, services, and/or information via computer networks, including the Internet. E-business refers to a broader definition of EC, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and conducting electronic transactions within an organization. E-business refers to a broader definition of EC, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and conducting electronic transactions within an organization.

Definitions by different means:- From a communication perspective, e-commerce is the delivery of information, products or payments via telephone lines, computer networks or any other means. From a communication perspective, e-commerce is the delivery of information, products or payments via telephone lines, computer networks or any other means. From a business perspective,e-commerce is the application of technology toward the automation of business transactions. From a business perspective,e-commerce is the application of technology toward the automation of business transactions. From a online perspective, e-com provides capability of buying & selling products & information on the internet. From a online perspective, e-com provides capability of buying & selling products & information on the internet.

Commerce E (Electronic) - Commerce Traditional Commerce Internet Commerce Mobile Commerce Business Focused E-Commerce Consumer focused E-Commerce

E-Commerce consists of: Electronic retailing (e-tailing) Electronic retailing (e-tailing) EDI (Electronic Data interchange) EDI (Electronic Data interchange) EFT (electronic Funds Transfer) EFT (electronic Funds Transfer)

Categories of E-commerce Four Major Domain on which E-Commerce Works Four Major Domain on which E-Commerce Works Business (Organization) Business (Organization) Consumer (Individual) B2B Brokering sites B2C e.g. Amazon Consumer (Individual) C2B e.g Priceline C2C e.g eBay

Categories of E-commerce Business-to-Business(B-to-B) site:is a website that is dedicated to exchange of information, goods and services to other business rather than final consumers. Business-to-Business(B-to-B) site:is a website that is dedicated to exchange of information, goods and services to other business rather than final consumers. Business-to-Customer(B-to-C) site: is a website where all transections take place between a business house and the final consumer. Business-to-Customer(B-to-C) site: is a website where all transections take place between a business house and the final consumer. Consumers-to-businesses (C2B): In C2B, consumers make known a particular need for a product or service, and suppliers compete to provide the product or service to consumers. An example is Priceline.com, where the customer names a product and the desired price, and Priceline tries to find a supplier to fulfill the stated need. Consumers-to-businesses (C2B): In C2B, consumers make known a particular need for a product or service, and suppliers compete to provide the product or service to consumers. An example is Priceline.com, where the customer names a product and the desired price, and Priceline tries to find a supplier to fulfill the stated need. Consumer-to-consumer (C2C): is a website where all the transections take place between a consumer and the website acting asa a platform that brings the buyer and the seller togther. Consumer-to-consumer (C2C): is a website where all the transections take place between a consumer and the website acting asa a platform that brings the buyer and the seller togther.

Other Categories of E-Commerce are: Government-to-Consumer(G-to-C) site: website is an attempt by the government to reach out to people in general. Government-to-Consumer(G-to-C) site: website is an attempt by the government to reach out to people in general. Business-to-Government(B-to-G) site: website is a variation of the B-to-B web site. This web site used by the government to exchange information with various business houses across the world. Business-to-Government(B-to-G) site: website is a variation of the B-to-B web site. This web site used by the government to exchange information with various business houses across the world.

B2C Offer directly to the customer an interface of activity Offer directly to the customer an interface of activity –Typical examples: Online book store (e.g. amazon.com) Online book store (e.g. amazon.com) Online car purchasing (e.g. automall.com) Online car purchasing (e.g. automall.com) Booking and purchase of airline tickets (e.g. ryanair.com) Booking and purchase of airline tickets (e.g. ryanair.com) Correspond to retail sale Correspond to retail sale Growth of B2C applications thanks to Internet Growth of B2C applications thanks to Internet A new kind of B2C applications are the Cybermalls A new kind of B2C applications are the Cybermalls Cybermalls

B2C : advantages and disadvantages Advantages: Advantages: –Allow company to extend existing services to customers –Allow company to increase its customers –Offer a wider choice and allow cheaper prices –May give to the company a worldwide visibility –Online shops are accessible 24h a day Disadvantages: Disadvantages: –Low order conversion rates order conversion ratesorder conversion rates –High risk (see Cyberphobia) (see Cyberphobia) (see Cyberphobia)

B2B Realize transactions needed to perform financial or commercial activities by companies over the Internet Realize transactions needed to perform financial or commercial activities by companies over the Internet Some typical applications: Some typical applications: –E-procurement E-procurement –E-Marketplace E-Marketplace The turnover is much greater than that dealed with B2C applications The turnover is much greater than that dealed with B2C applications

B2B : advantages and disadvantages Advantages: Advantages: –Help to automate communications between companies making them easier and quicker –Allow to cut prices drastically –Help in reducing mistakes Disadvantages: Disadvantages: –Often need legacy integration

C2C Concern the consumers who run negotations with other consumers sometimes utilizing as intermediary a company Concern the consumers who run negotations with other consumers sometimes utilizing as intermediary a company –Examples: Ebay Ebay Autotrader.com Autotrader.com

C2C : advantages and disadvantages Advantages Advantages –Allow consumers to interact directly among them –Give to the consumers a new way of purchasing and selling services and goods Disadvantages Disadvantages –Little earning capacity

B2G applications Correspond to all kind of transactions between company and public administrator Correspond to all kind of transactions between company and public administrator Utilized mostly in the USA Utilized mostly in the USA

Advantages of E-Commerce Able to conduct business 24 x 7 x 365 Able to conduct business 24 x 7 x 365 Access the global marketplace Access the global marketplace Speed Speed Opportunity to reduce cost Opportunity to reduce cost Platform independent Platform independent Customer self service Customer self service Large purchase per transaction Large purchase per transaction People can shop in different ways People can shop in different ways Large catalogs Large catalogs Improved customer relation Improved customer relation

Disadvantages of e-commerce Time for delivery of physical products Time for delivery of physical products Limited and selected sensory information Limited and selected sensory information Returning goods Returning goods Privacy, security, payment, identity Privacy, security, payment, identity Personal service Personal service

Need for E-Commerce Increased competition Increased competition Reduction time to market Reduction time to market Improvement in payment process Improvement in payment process Electronic data interchange Electronic data interchange Popular with consumers and suppliers Popular with consumers and suppliers To improve productivity and to generate profit To improve productivity and to generate profit

In Future While E-Commerce may not completely replace other forms of Commerce, it is likely to be the dominant mode of the commercial transactions in the future. While E-Commerce may not completely replace other forms of Commerce, it is likely to be the dominant mode of the commercial transactions in the future. Colleges and Schools including Business Schools should reflect this trend in the curriculum to train the future generation of Managers. Colleges and Schools including Business Schools should reflect this trend in the curriculum to train the future generation of Managers.