1. Ecommerce Digital Markets, Digital Goods
Business Information Systems
Laudon & Laudon, Ch.9 (P.296)

2. E-Commerce Today
E-commerce: the use of the Internet and Web to transact business; digitally enabled transactions
Began in 1995 with Netscape.com accepted its first add and grew exponentially; still growing at an annual rate of 25 percent
Companies that survived the dot-com bubble burst and now thrive
The e-commerce revolution is still in its early stages

3. The Growth of E-Commerce
Figure 9-1
Retail e-commerce revenues have grown exponentially since 1995 and have only recently “slowed” to a very rapid 25 percent annual increase, which is projected to remain the same until 2008.

4. Why E-commerce Is Different?

5. Why E-commerce Is Different
Ubiquity (It is available everywhere at all time)
Global reach(Potential market size = more than 1 billion)
Universal standards (market entry costs, search costs)
Richness (complexity and content of a message) Richness versus Reach

6. Why E-commerce Is Different
Interactivity
Information density (price transparency, cost transparency, price discrimination)
Personalization/Customization(Based on consumer’s purchases and behavior)

7. Key Concepts in E-commerce
Information symmetry
Flexibility due to lower search cost, transaction costs, menu costs(merchants’ costs of changing prices) and dynamic pricing( The price of product varies depending on the demand characteristics or supply situation)
Disintermediation

8. Key Concepts in E-commerce
Digital goods: delivered over a digital network
Internet business models (Virtual store front, Information broker, Transaction broker, Online market place, Content place, Social network, Portal, Service provider )
Music track, video, software, news paper

9. Internet Business Models
Communication and Social Networking (eBay, GoIndustry , banner ads, pop-up) Social Shopping(Kaboodle, ThisNext, StyleHive)
Digital content, entertainment, and services (New York Times, Online games,Movies, music,podcasting, vcast)

10. Categories of Electronic Commerce
Business-to-consumer (B2C)
Business-to-business (B2B)
Consumer-to-consumer (C2C)
Mobile commerce (m-commerce)

11. Business-to-Business Electronic Commerce
Procurement/E-procurement
Catalogs, Auctions
Vendor-managed inventory systems
Automated purchasing: Electronic Data Interchange
Payment systems
Private industrial networks (Private Exchanges)
E.g. Network of all suppliers of Wal-Mart
Net marketplaces (or Exchanges)
Across industries
Within a specific Industry (e.g. FoodTrader.com)

12. Electronic Data Interchange (EDI)
Figure 9-5
Companies use EDI to automate transactions for B2B e-commerce and continuous inventory replenishment. Suppliers can automatically send data about shipments to purchasing firms. The purchasing firms can use EDI to provide production and inventory requirements and payment data to suppliers.

13. M-Commerce Services and Applications
Mobile bill payment
Banking and financial services
Wireless advertising
Location-based services
Games and entertainment

14. M-Commerce Challenges
Awkwardness of keyboards and screens
Data transfer speeds
Cost
Limited memory and power supplies on devices
Content

15. Types of Electronic Payment Systems
Digital credit card payment systems (eCharge)
Digital wallet (Q*Wallet)
Shoppers don’t need to enter their address and card information repeatedly.
Micropayment
Accumulated balance digital payment systems
(QPass)
Stored value payment systems (eCount)
Payment is based on the value stored in an online digital account.

16. Types of Electronic Payment Systems
Peer-to-peer payment systems (e.g. PayPal)
Digital checking payment systems (e.g. eCheck)
Electronic billing presentment and payment systems (e.g. your bank’s online bill payment feature; CheckFree – consolidates bills)