Electronic Commerce

Living in the IT Era

Commerce

Consists of:
The exchange of goods
Buyers - these are people with money who want
and services for money
to purchase a good or service.

Sellers - these are the people who offer goods

and services to buyers.

Producers - these are the people who create

the products and services that sellers offer to
buyers.
E - Commerce

•E-Commerce or Electronic commerce is a process of

buying, selling, transferring, or exchanging products,
services, and/or information via electronic networks
and computers

•Electronic commerce was identified as the

facilitation of commercial transactions electronically,
using technology such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer (EFT).
Electronic Data Interchange:
Electronic Funds Transfer:

EDI is the structured transmission of data

between organizations by electronic means.
It is used to transfer electronic documents
or business data from one computer
system to another computer system.

EFT is the electronic exchange or transfer

of money from one account to another.
Brief History

1970s 1980s

E- commerce meant the facilitation of The growth and acceptance of credit

commercial transactions electronically, cards
using technology such as Electronic Data
Automated teller machines (ATM)
Interchange (EDI) and Electronic Funds
Transfer (EFT), allowing businesses to send Telephone banking
commercial documents like purchase
Airline reservation system
orders or invoices electronically.
Brief History

1990s 2000s

The Internet commercialized and users Many European and American business
flocked to participate in the form of companies offered their services
dot-coms, or Internet start-ups through the World Wide Web.

Innovative applications ranging from Since then, People began to associate a

online direct sales to e-learning word “e- commerce”
experiences
Types of Commerce

Commerce

Electronic Physical or Traditional Commerce

Commerce

Internet 
Commerce

Business Consumer focused

focused e-commerce 
e-
commerc
e
Different types of E-Commerce

Business Customer
(organization) (individual)

Business B2B B2C

(organization) (e.g TPN) (e.g Amazon)

Customer C2B C2C

(individual) (e.g Priceline) (e.g eBay)
E-commerce

BUSINESS TO BUSINESS (B2B)

• B2B can be open to all interested parties or limited to specific,
pre-qualified participants (private electronic market).
• Companies doing business with each other such as
manufacturers selling to distributors and wholesalers selling to
retailers.
E-commerce

BUSINESS TO BUSINESS (B2B)

• A B2B model focuses on providing
products from one business to
another.
• E-commerce between companies
Ex:
• Intel selling microprocessor to Dell
• Heinz selling ketchup to McDonalds
• www.tpn.com
E-commerce

BUSINESS TO CONSUMER (B2C)

• Businesses selling to the general public typically through catalogs utilizing
shopping cart software.
• B2C is the indirect trade between the company and consumers.
• It provides direct selling through online.
• If you want to sell goods and services to customer so that anybody can
purchase any products directly from supplier’s website.
E-commerce

BUSINESS TO CONSUMER (B2C)

• B2C sales are the traditional retail
model, where a business sells to
individuals, but business is conducted
online as opposed to in a physical store.
• Involves customers gathering
information, purchasing physical
goods, or receiving products over an
electronic network
Ex:
• Dell selling me a laptop
• Lazada
E-commerce

CONSUMER TO BUSINESS (C2B)

• A consumer posts his project with a set budget online and within hours
companies review the consumer's requirements and bid on the project.
• The consumer reviews the bids and selects the company that will complete
the project.
• C2B empowers consumers around the world by providing the meeting
ground and platform for such transactions.

Ex: www.priceline.com
E-commerce

CONSUMER TO CONSUMER (C2C)

• It facilitates the online transaction of goods or services between
two people.
• Though there is no visible intermediary involved but the parties
cannot carry out the transactions without the platform which is
provided by the online market maker such as eBay.
E-commerce

CONSUMER TO CONSUMER (C2C)

• Commerce between private
individuals or consumers
Ex:
• Mary buying an iPad from Tom on
eBay
• Me selling a car to my neighbour
• www.shopee.com
• airbnb.com
E-commerce

BUSINESS TO ADMINISTRATION (B2A)

• transactions are carried out online between companies and
public administration.
• involves a variety of services such as social security,
employment, and legal documentation.
E-commerce

CONSUMER TO ADMINISTRATION (C2A)

• this type of ecommerce involves all transactions between
individual people and public administration.
• A few examples of this would be:
• Education – publishing and circulating information, distance
learning
• Tax – Tax return forms and payments
• Health – payments to health services, appointments
Examples

B2C: www.lazada.com An individual purchases a book on the Internet.

A government employee reserves a hotel room

C2C: www.shopee.com
over the Internet.

B2B: www.tpn.com
A business buys office supplies on-line or
through an electronic auction.
C2B: www.priceline.com
A manufacturing plant orders electronic
components from another plant within the
company using the company's intranet.
Examples
E-commerce

Advantages Disadvantages
• To consumers (think about the consumer buying • There is no guarantee of product quality.
process: search, evaluate and execute): • There are many hackers who look for opportunities,
• To businesses (think about the common objective of and thus an ecommerce site, service, payment
every business): gateways, all are always prone to attack.
• Faster buying/selling procedure, as well as easy to
find products.
• Buying/selling 24/7.
• Low operational costs and better quality of services.
• Easy to start and manage a business.
• No need of physical company set-ups.
• Customers can easily select products from different
providers without moving around physically.
Organizing Theme: Business

• Staying competitive • Better Targeting and more

personalization
• Going Global
• Different traffic stream
• Lowering costs
• Easily scale and grow
• Sales on advertising
• A more pleasant customer
• Save on staff
experience
• Save on rent
• Passive earnings
Organizing Theme: Technology

• Architectural Framework of E-Commerce

• Architectural framework of e-commerce means the synthesizing of
various existing resources like DBMS, data repository, computer
languages, software agent-based transactions, monitors or
communication protocols to facilitate the integration of data and
software for better applications.
Organizing Theme: Technology

• Architectural Framework of E-Commerce

• Application services

• Information Brokerage and Management Layer

• Interface and support services

• Secure messaging layer

• Middleware services

• Network Infrastructure
Organizing Theme: Society

• at no time one can know the characteristics of the item you want to buy and you can also
compare the quality and its characteristics with another competitive brand available in the
market along with the feedback result of other users

• society and groups of people or communities can be linked together to share their points of
view and ideas

• The digital solutions that replaced traditional applications offer many opportunities for
businesses and individual consumers.

• The services are aimed at customers.

• The products are negotiated too quickly

• The number of errors reduced.

Benefits of E-Commerce

Benefits to Society
• Access for 24 hours
• Compared to Actual Buying, Through Online the Price Gets Reduced
• Global Market Place
• Easy to compare prices
• Return of goods
Benefits of E-Commerce

Benefits to organizations Benefits to consumers

• Global reach • More products and services
• Cost reduction • Cheaper products and services
• Extended hours: 24/7/365 • Instant delivery
• Customization • Information availability
• Improved customer relations
Academic Disciplines Concerned with E-commerce

First Discipline – Consumer Behavior on the Internet

• commerce is all about getting the customer to take out his

wallet, put out his credit card and enter the credit card
number. The web shop should provide highly contextual and
personalized brand experiences that engage and delight
customers along every step of their journey in the website.
Academic Disciplines Concerned with E-commerce

Second Discipline – Legal Disclaimer

• Ecommerce is all about trust – you must create trust with

the user and get them to hand over to you private data.
Academic Disciplines Concerned with E-commerce

Third Discipline – Supply Chain Management/Business

model

• The supply chain management ensures in the organization

the correct flow of inputs and outputs between the different
business elements. The web shop is a new entity that
requires certain inputs and generates certain outputs.
Academic Disciplines Concerned with E-commerce

Fourth Discipline – Data Security

• On line shops are constant targets for hackings and attacks.

The attacks focus on two aspects of the web shop – the
website itself and the data that it manages.
Academic Disciplines Concerned with E-commerce

Fifth Discipline – Internet Marketing

• Marketing on the internet is building a customer portfolio

that gathers information at every stage of the customer
journey. In the practice the eCommerce solution should
offer tools that support the marketing and gathers critical
analytical data in real time to drive optimal business
decisions.
Business applications

• Email

• Instant messaging

• Online shopping and order

tracking

• Online banking

• Shopping cart software

• Teleconferencing

• Electronic tickets
Online Shopping

• Online shopping is the process of Advantages

buying goods and services from • 24-hour access
merchants who sell on the Internet
• Ability to comparison shop
• The in-home privacy
• Online consumers are evenly split
• Variety
between men and women and tend
to be better educated, younger, and
more affluent than the general
population
Online Shopping

Favorite websites for shopping include

those featuring:

• Event tickets
• Online periodicals subscription
• Flowers and gifts
• Consumer electronics
• Travel
Electronic Payment Systems

Electronic wallet
• a computerized stored value that holds
credit card information, electronic cash,
owner identification, and address
information
• Accepts:
• Credit card
• Debit card
• Smart card
• Online banking and Cash On Delivery.
Summary and Conclusion

• The Internet has lead to the birth and

evolution E- commerce. E-commerce has
now become a key component of many
organizations in the daily running of their
business.

• As the Internet and in turn E-commerce

has developed, and continues to evolve
and grow, it is vital that any organization,
in any particular industry, must base its
strategic planning around such a rapidly
growing medium.