E-COMMERCE

Electronic commerce, commonly known as E-commerce: is trading in products or services using computer networks, such as the Internet.
E-COMMERCE: Sharing business information, maintaining business relationships and conducting business transactions using computers
connected to telecommunication network.

E-COMMERCE CATEGORIES
 Electronic markets, also known as online markets or digital markets, are virtual platforms where buyers and sellers interact to
exchange goods, services, or information electronically.
 Electronic Data Interchange (EDI):
• It provides a standardized system
• Coding trade transactions
• Communicated from one computer to another without the need for printed orders and invoices & delays & errors in paper handling
 Internet Commerce: It is use to advertise & make sales of wide range of goods & services.
MERITS OF E-COMMERCE:
 Buying/selling a variety of goods and services from one's home or business
 Anywhere, anytime transaction
 Can look for lowest cost for specific goods or service
 Order processing cost reduced
 Electronic funds transfer faster

DEMERITS OF E-COMMERCE:
 Electronic data interchange using EDI is expensive for small businesses
 Security of internet is not very good - viruses, hacker attacks can paralyze e-commerce

THREATS OF E-COMMERCE:
 Hackers attempting to steal customer information or disrupt the site

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  A server containing customer information is stolen.
 Imposters can mirror your ecommerce site to steal customer money

FEATURES OF E-COMMERCE:
 GLOBAL REACH: The technology reaches Commerce is enabled across cultural and across national boundaries, around the earth. national
boundaries seamlessly and without modification.
 UNIVERSAL STANDARDS: There is one set of technical media standards technology standards, namely Internet across the globe.
 RICHNESS: Video, audio, and text messages Video, audio, and text marketing messages are possible.
 INTERACTIVITY: The technology works Consumers are engaged in a dialog that through interaction with the user.
 INFORMATION DENSITY: The technology Information processing, storage, and reduces information costs and raises quality.
 PERSONALIZATION/CUSTOMIZATION: The Personalization of marketing messages and technology allows personalized messages to
customization of products and services are be delivered to individuals as well as groups.

BUSINESS MODELS OF E-COMMERCE:

There are mainly 4 types of business models based on transaction party.
A common classification of E-Commerce is by the nature of transactions.
 BUSINESS-TO-CONSUMER (B2C): In a Business-to-Consumer E-commerce environment, companies sell their online goods to consumers
who are the end users of their products or services.
 BUSINESS - TO - BUSINESS (B2B): In a B2B E-commerce environment, companies sell their online goods to other companies without being
engaged in sales to consumers.
 CUSTOMER TO BUSINESS (C2B): In a Consumer-to-Business E-commerce environment, consumers usually post their products or
services online on which companies can post their bids.
 CUSTOMER TO CUSTOMER (C2C): In this transaction customer sells directly to customers.
example: selling residential properties, cars, etc. A well-known example is eBay.
Digital Business Models
A digital business model refers to the specific way in which a company creates and delivers value to its customers using digital technology.

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 Digital Business Models are the following
 Multi-sided platform model: is based on the idea that digital markets are platforms that connect different groups of users, such
as buyers and sellers, and facilitate transactions between them.
 Freemium model: is based on the idea of offering a basic service for free while charging for premium services.
 Subscription model: involves charging users a fee for access to a service or product over a specified period, typically monthly or
annually.
commonly used in digital media markets such as music and video streaming services.
 Pay-per-use model: involves charging users for each use or transaction, such as pay-per-click advertising or pay-per-download
for digital products.
 Auction model: involves the sale of goods or services to the highest bidder in an online auction.
 Block-chain-based model: involves using block-chain technology to create decentralized digital marketplaces that operate
without a central authority or intermediary.
 Peer-to-peer model: involves connecting buyers and sellers directly through a digital marketplace, without the need for
intermediaries such as retailers or wholesalers.
 Affiliate model: model involves collaborating with other businesses to promote their products or services and earning a
commission on any resulting sales.
Affiliate marketing is used in e-commerce and digital media markets.

E-GOVERNANCE
E-governance is the application of ICT for delivering government services.
 BUSINESS - TO - GOVERNMENT (B2G): websites are used by government to trade and exchange information with various business
organizations.
 GOVERNMENT - TO - BUSINESS (G2B): websites support auctions, tenders and application submission functionalities.

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  GOVERNMENT - TO - CITIZEN (G2C): websites support auctions of vehicles, machinery or any other material.

DIGITAL BUSINESS MODELS

A digital business model: refers to the specific way in which a company creates and delivers value to its customers using digital technology.
 Multi-sided platform model: this model that is based on the idea that digital markets are platforms that connect different groups of users,
such as buyers and sellers.
 Network effects model: this model emphasizes the importance of network effects in digital markets, whereby the value of the platform
increases as more users join.
 Freemium model: This model is based on the idea of offering a basic service for free while charging for premium services. The best
example is LinkedIn marketing.
 Subscription model: This model involves charging users a fee for access to a service or product over a specified period, typically monthly or
annually.
This model is commonly used in digital media markets
 Pay-per-use model: This model involves charging users for each use or transaction, such as pay-per-click advertising or pay-per-download
for digital products.
 Auction model: This model involves the sale of goods or services to the highest bidder in an online auction.
 Affiliate model: This model involves collaborating with other businesses to promote their products or services and earning a commission
on any resulting sales.
 Block-chain-based model: This model involves using block-chain technology to create decentralized digital marketplaces that operate
without a central authority or intermediary.
 Peer-to-peer model: This model involves connecting buyers and sellers directly through a digital marketplace, without the need for
intermediaries such as retailers or wholesalers.

Electronic Payment Systems

 Electronic payment systems: are proliferating in banking, retail, health care, on-line markets, and even government. In fact, anywhere
money needs to change hands.

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 electronic funds transfer (EFT): is any transfer of funds initiated through an electronic terminal, telephonic instrument, or computer or
magnetic tape so as to order, instruct, or authorize a financial institution
THREE BROAD CATEGORIES OF EFT:
 Banking and financial payments.
 Retailing payments.
 On-line electronic commerce payments.
Banking and financial payments
 Large-scale or wholesale payments (e.g., bank-to-bank transfer)
 Small-scale or retail payments (e.g., automated teller machines)
 Home banking (e.g., bill payment).

DIGITAL MARKETS TECHNOLOGIES DEFINITIONS

Digital market technologies refer to the various technologies that facilitate the buying and selling of goods and services online.
These technologies include software and hardware tools that enable businesses to conduct electronic transactions, online marketing, data
analytics, and customer relationship management.
 E-commerce platforms: These are software tools that enable businesses to set up and manage online stores and process online
payments.
 Mobile applications: These are software tools that allow businesses to reach customers via their mobile devices.
 Social media platforms: These are websites and applications that allow businesses to interact with customers, promote their products.
 Cloud computing: This technology enables businesses to store and access data, applications, and services over the internet.
 Artificial intelligence: AI technologies are used in digital markets to analyze customer data and automate business processes.
 Internet of Things (IOT): This technology allows physical devices to connect and exchange data over the internet.
 cybersecurity: This technology is essential for digital markets to protect sensitive customer data and prevent cyber-attacks.
 5G Networks: This technology offers faster and more reliable internet connections, enabling businesses to deliver high-quality digital
experiences to customers.

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  Payment gateways: These are software tools that facilitate online payments, such as credit card processing and electronic fund
transfers (EFT).

DIGITAL MARKETS APPLICATION

 E-commerce: One of the most common applications of digital market technologies is in the field of e-commerce. Platforms such as
Amazon, eBay and Alibaba.
 Sharing economy: Digital market technologies have also enabled the rise of sharing economy platforms, such as Airbnb and Uber.
 Financial services: Digital market technologies have disrupted the traditional financial services industry.
For example, online banking platforms and mobile payment apps have made it easier for people to access and manage their financial
accounts, transfer money, and make payments.
 Crowdfunding and crowd-sourcing: Crowdfunding and crowdsourcing platforms, such as Kickstarter and GoFundMe, have gained
popularity as digital market technologies that allow individuals and businesses to raise funds for various projects or causes.
 Online advertising and marketing: Digital market technologies have transformed the advertising and marketing industry.
Online advertising platforms, such as Google Ads and Facebook Ads, enable businesses to target and reach their audiences
DIGITAL MARKETS GOVERNANCE
Digital markets governance: refers to the set of policies and regulations that govern the behavior of companies operating in the digital
economy.
IMPORTANCE OF DIGITAL MARKETS GOVERNANCE
 Ensuring Fairness and Transparency: Digital markets can have significant influence over economic activities, and governance helps ensure
these markets operate fairly and transparently.
 Protecting User Rights and Interests: Digital markets involve the collection and use of vast amounts of user data, and governance helps
protect the rights and interests of users.
 Promoting Competition and Innovation: Governance in digital markets aims to foster healthy competition among market participants,
which can lead to increased innovation, better products and services, and improved consumer choice.
 Managing Risks and Ensuring Security: Digital markets are vulnerable to various risks, such as cybersecurity threats, fraud, and other forms
of abuse.

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 Promoting Public Interest: Digital markets can have wide-ranging societal impacts, and governance ensures that digital markets operate in
the best interests of society as a whole.
DIGITAL MARKETS GOVERNANCE POLICIES
 Net Neutrality: The principle that all data on the internet should be treated equally by internet service providers.
 Data Protection: Laws and regulations that protect personal data from being collected, processed, or used without consent.
 Cyber-security: Policies and regulations that address cyber threats, including measures to protect against cyber-attacks to ensure the
confidentiality, integrity, and availability of digital assets.
 Antitrust Regulations: Rules that promote competition and prevent the abuse of market power.
 Intellectual Property: Laws and regulations that protect intellectual property rights, including patents, copyrights and trademarks.
 E-commerce Regulations: Laws and regulations that govern online transactions, including consumer protection, privacy and dispute
resolution.
Regulatory bodies for digital markets
 These bodies play a crucial role in the governance of digital markets, which encompass various online platforms, technologies, and
services.
 Are responsible for creating and enforcing rules, regulations, and policies that ensure
1) fair competition.
2) protect consumer rights.
3) promote innovation.

4) maintain data privacy and security in the digital economy.

 Federal Trade Commission (FTC) is a key regulatory body in the United States responsible for protecting consumers and promoting
competition.
 European Commission's Directorate-General for Competition: This is responsible for enforcing competition law in the European Union.

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 Federal Communications Commission (FCC): in the United States is a regulatory body used to regulates communications and
telecommunications, including digital markets.
 Consumer Financial Protection Bureau (CFPB): in the United States is a regulatory body that protects consumers in financial
transactions, including those that take place in digital markets.
 Data Protection Authorities: Are responsible for enforcing data protection and privacy laws in digital markets.
 Competition and Markets Authority (CMA): The CMA in the United Kingdom is a regulatory body that promotes competition and
enforces competition law in digital markets.
 Internet Corporation for Assigned Names and Numbers (ICANN): CANN is a global non-profit organization that is responsible for
managing the domain name system (DNS) and coordinating the allocation and assignment of IP addresses.
 Communications Regulatory Authority (CRA): The CRA in Qatar is a regulatory body that oversees the telecommunications and
information technology sectors, including digital markets
It sets regulations related to licensing, competition, and consumer protection in digital markets.

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