1. MGT 3225: E-Business Lecture 1: Introduction to E-Commerce Md. Mahbubul Alam, PhD

2. Define e-commerce and describe how it differs from e-business. Identify and describe features of e-commerce technology. Describe the major types of e-commerce. Identify major academic disciplines contributing e-commerce. Intended Learning Outcomes 2

3. E-commerce infrastructure: The Internet Worldwide network of computer networks built on common standards Created in late 1960s Services include the Web, e-mail, file transfers, etc. Can measure growth by looking at number of Internet hosts with domain names

4. E-commerce infrastructure: The Web Most popular Internet service that runs on the Internet infrastructure. Developed in early 1990s Provides access to Web pages  HTML documents that may include text, graphics, animations, music, videos Web content has grown exponentially  2 billion Web pages in 2000  At least 40–50 billion pages today

5. The ‘newest, latest and greatest’ development in Internet infrastructure. Provides ability to access the Internet from a variety of mobile devices. e.g., smartphones, tablets, ultra-light laptops. As of December, 2014 – 120.35 million Mobile phone subscribers – 43.64 million Internet subscribers – 42.17 million Mobile Internet subscribers E-commerce infrastructure: The Mobile Platform

6. E-commerce Trends 2009–2010 New business models based on social technologies, consumer-generated content, and services 2009 a flat year, but growth expected to resume in 2010 Broadband and wireless access continue to grow Mobile e-commerce begins to take off Traditional media losing subscribers

7. The First 30 Seconds First 15 years of e-commerce Just the beginning Rapid growth and change Technologies continue to evolve at exponential rates Disruptive business change New opportunities

8. What is e-Commerce? All electronically mediated information exchanges between an organization & its external stakeholders. Roughly, refers to buying and selling using the Internet, however it is much more than electronically mediated financial transaction between organizations and customers. Non-financial transactions like customer requests for further information would also be considered to be part of e-commerce. Therefore, electronically transactions at any stage in supply chain, pre-&-post sales should be considered as e-commerce. Types: Buy-side e-commerce: transactions between a purchasing organizations & its suppliers; Procurement of resources from suppliers. Sell-side e-commerce: E-commerce transactions between a supplier organization & its customers; Selling products to an organization’s customers.

9. Buy-side Vs. Sell-side e-Commerce

10. Sell-side e-Commerce: Types 1.Transactional e-commerce site Sales products. Also, provide product information to the customer. e.g., retail sites, travel sites, online banking. 2.Services-oriented relationship-building web sites Provide detailed information to stimulate purchase and build relationship through website or e-newsletters. 3.Brand-building sites Support the brand by developing an online experience of the brand. e.g., Low-value, high-volume fast-moving consumer goods (FMCG brands). 4.Portal, publisher or media sites Provide information, news or entertainment about a range of topics. e.g., “Portals” and SNS-> gateway of information. Hybrid revenue model from advertising, commission-based sales, sale of customer data.

11. What is e-Business? All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes. The transformation of key business processes through the use of Internet Technologies. “when a business has fully integrated Information & Communication Technologies (ICTs) into its operations, potentially redesigning its business processes around ICT or completely reinventing its business model….e-business, is understood to be the integration of all these activities with the internal processes of a business through ICT”. Information & Communication Technology (ICT)  The software applications, computer hardware and networks used to create e-business systems.

12. e-Commerce Vs. e-Business Which view is more realistic?

13. Why Study E-commerce? E-commerce technology different more powerful than previous technologies E-commerce bringing fundamental changes to commerce Traditional commerce Passive consumer Sales  force driven Fixed prices Information asymmetry

14. Features of E-commerce

15. Unique Features of E-commerce Technology Ubiquity, available everywhere: at work, at home; reduces transaction costs, saves time & energy. Global reach, reaches across cultural, regional & national boundaries conveniently & cost-effectively. Universal standards, one set of technology standards, Information richness, audio, video and text messages are possible. Interactivity, two-way communication; merchant to consumer, among consumers. Information density, quality & quantity of information; reduces information cost. Personalization/customization, personalized advertisements, customized products/service. Social technology, user generated content, C2C, blogging, SNS.

16. Origins & Growth of E-commerce Precursors Baxter Healthcare’s remote order entry system. A telephone-based modem that permitted hospitals to reorder supplies from Baxter. Electronic Data Interchange (EDI), allows to exchange commercial documents & conduct digital commercial transactions across private networks. French Minitel (1981), videotext system; telephone with 8-inch screen, used at ticket agencies, travel services, retail products & online banking.  None had functionality of Internet E-commerce: Began in 1995 First sales of banner advertisements Since then, e-commerce fastest growing form of commerce in the United States (155 million consumers spend about $419 billion dollars, plus businesses more than $4.8 trillion dollars).

17. The Growth of E-commerce: B2C & B2B B2C growth B2B growth

18. Potential Limitations on the Growth of B2C E-commerce Expensive technology Sophisticated skill set Persistent cultural attraction of physical markets and traditional shopping experiences Persistent global inequality limiting access to telephones and computers Saturation and ceiling effects

19. 1995-2000 Invention 2001-2006 Consolidation 2007-present Re-invention Key concepts developed, technology driven Emphasis on business-driven approach Extension of technologies, such as, mobile technologies enable social, local and mobile commerce. UngovernedStronger regulation and governance Extensive government surveillance EntrepreneurialLarge traditional firms Entrepreneurial social & local firms DisintermediationStrengthening intermediaries Proliferation of small online intermediaries renting business processes of larger firms Pure online strategiesMixed ‘bricks-and- clicks strategies Return of pure online, extension of ‘brick- and-clicks in traditional retail markets. Low-complexity retail products High-complexity retail products Retail, services, and content. Evolution of E-commerce

20. Development of E-commerce

21. Early Visions of E-commerce Computer scientists:  Inexpensive, universal communications and computing environment accessible by all Economists:  Nearly perfect competitive market and friction-free commerce  Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage Entrepreneurs:  Extraordinary opportunity to earn far above normal returns on investment—first mover advantage

22. Assessing E-commerce Many early visions not fulfilled  Friction-free commerce Consumers less price sensitive Considerable price dispersion  Perfect competition Information asymmetries persist  Disintermediation Yahoo, Amazon, Expedia, TripAdvisor  First mover advantage Fast-followers often overtake first movers First movers, e.g., eToys, FogDog, Webvan out of business

23. Privacy Online: Does Anybody Care? Class Discussion What techniques of privacy invasion are described in the case? Which of these techniques is the most privacy-invading? Why? Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer? How do you protect your privacy on the Web?

24. Academic Disciplines Concerned with E-commerce Technical approach – Computer science – Management science – Information systems Behavioral approach – Information systems – Economics – Marketing – Management – Finance/accounting – Sociology