INTRODUCTION TO

E-COMMERCE
 New opportunities (and risks) in creating new
WHY STUDY E-COMMERCE? business models (destroying existing ones)
It is important in order to be able to perceive
and understand the opportunities and risks
Perkembangan Teknologi yang begitu
cepat (to evolve at exponential rates) By studying e-commerce, students will be able
• In 1994, E-commerce did not exist ▪ identify the technological, business, &social
In 2020: around 2.3 billion forces that have shaped, and continue to
consumers spent about over $5 shape, the growth of e-commerce
trillion and businesses spent almost ▪ be ready to participate in, discussions of e-
$27 trillion, purchasing goods and commerce in the firms where you work
services via a desktop computer or ▪ to analyze an e-commerce business idea
mobile device. (which model is the most effective), the
• By 2023, consumers worldwide will technological underpinnings of an e
be spending around $7 trillion and commerce presence (the security and ethical
businesses over $32 trillion in issues), as well as how to optimally market the
digital transactions.
business
WHAT IS E-COMMERCE?
the use of the Internet, the Web, and mobile apps and
browsers running on mobile devices to transact
business.
More formally, it can be defined as digitally enabled
commercial transactions between and among
organizations and individuals
• Digitally enabled transactions include all transactions
mediated by digital technology
• Commercial transactions involve the exchange of
value (e.g., money) across organizational or individual
boundaries in return for products and services.
E-commerce = digital commerce
 E-Commerce vs E-Business
• E-commerce encompasses the entire world of electronically based
organizational activities that support a firm’s market exchanges—including a
firm’s entire information system infrastructure.
• E-business encompasses the entire world of internal and external
electronically based activities, including e-commerce
E-business is the digital enabling of transactions and processes within a
firm, involving information systems under the control of the firm
• For example, a company’s online inventory control mechanisms are a
component of e-business, but such internal processes do not directly
generate revenue for the firm from outside businesses or consumers,
as e-commerce, by definition, does.
Technology behind E-Commerce
World Wide Web
Internet Mobile
(the Web)
Platform
worldwide an information provides the
network of system ability to
computer running on access the
Internet Internet from a
networks built infrastructure variety of
on common that provides mobile devices
standards access to such as
billions of web smartphones,
pages tablets, and
other
ultralightweight
laptop
computers
E-commerce technologies provide a
number of unique features that
have impacted the conduct of
business
ubiquity information density
available just about the total amount and
everywhere, at all times quality of information
available to all market
Global reach participants
the total number of users or
customers an e-commerce business
can obtain (globally) personalization
the targeting of marketing
messages to specific
Universal standards individuals by adjusting
standards that are shared the
by all nations around the message to a person’s
world name, interests, and past
purchases
Richness
the complexity and
content of a message customization
changing the delivered
product or service
interactivity based on
technology that allows for a user’s preferences or
two-way communication prior behavior
between merchant &
consumer
 TYPES OF E-COMMERCE
business-to-consumer (B2C) e-commerce
online businesses selling to individual consumers
business-to-business (B2B) e-commerce
online businesses selling to other businesses
consumer-to consumer (C2C)
e-commerce consumers selling to other consumers
mobile e-commerce (m-commerce)
use of mobile devices to enable online transactions
social e-commerce
e-commerce enabled by social networks and online social relationships
local e-commerce
e-commerce that is focused on engaging the consumer based
on his or her current geographic location
 E-COMMERCE: ORGANIZING THEMES

TECHNOLOGY: INFRASTRUCTURE (Chapter 3 – 5)

BUSINESS: BASIC CONCEPTS (Chapter 2, 6, 7, 9 – 12)

SOCIETY: TAMING THE JUGGERNAUT (Chapter 8)

E-commerce Business
Models and Concepts
 Business Model
a set of planned activities designed to result in a profit in a marketplace
• The business model is at the center of the business plan. A business plan is
a document that describes a firm’s business model.

An e-commerce business model aims to use and leverage the unique

qualities of the Internet, the Web, and the mobile platform
 value proposition
defines how a company’s
product or service fulfills
the needs of customers
revenue model
describes how the firm will market opportunity
earn revenue, produce refers to the company’s
profits, and produce a intended marketspace
superior return on invested and the overall potential
capital financial opportunities
available to the firm in
that marketspace
Competitive Environment
refers to the other companies
operating in the same
competitive advantage
marketspace selling
achieved by a firm when it
similar products
can produce a superior
product and/or bring the
product to market at a
lower price than most, or
market strategy all, of its competitors
the plan you put together
that details exactly how
you intend to enter a new organizational
market and attract new development
customers plan that describes
how the company will
organize the work that
management team
needs to be
employees of the
accomplished
company
responsible for making
the
business model work
 MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS MODELS
• e-tailer: online retail store
• community provider: creates an online environment where people with similar interests can
transact (buy and sell goods); share interests, photos, and videos; communicate with likeminded
people; and receive interest-related information
• content provider: distributes information content, such as digital news, music, photos, video, and
artwork
• Portal: offers users powerful search tools as well as an integrated package of content and services
all in one place
• transaction broker: processes transactions for consumers that are normally handled in person, by
phone, or by mail
• market creator: builds a digital environment where buyers and sellers can meet, display products,
search for products, and establish a price for products
• service provider: offers services online
MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS MODELS
MAJOR BUSINESS-TO-CONSUMER (B2C) BUSINESS MODELS
HOW E-COMMERCE CHANGES BUSINESS:
STRATEGY, STRUCTURE, AND PROCESS

• industry structure
• Industry and firm operations (business processes and
value chains)
• business strategies
HOW E-COMMERCE CHANGES BUSINESS:
STRATEGY, STRUCTURE, AND PROCESS