E-COMMERCE

FY B.COM
SEM-I
LEARNING OUTCOMES
• After completion of the course, students would be able to:
CLO1: understand various concepts e-commerce.
CLO2: apply various concepts of e-commerce
CLO3: analyse business models
CLO4: evaluate E-CRM, SCM and strategies
CLO5: elaborate e-marketing strategies
INTRODUCTION TO E-COMMERCE

Learning Outcomes:
Students will be able to outline various concepts e-commerce.

8/16/2024 3
CONTENT
• Introduction, E-Commerce – Meaning, Features Evolution of E-commerce,
Types of E-Commerce (B2B, B2C, etc.)
• E-commerce and E-business, E-commerce versus Traditional Business, M-
Commerce
• Pros and Cons of E-commerce, Role of E-commerce in Modern world
• Tools of E-commerce: Websites, Portals, etc

8/16/2024 4
MEANING
• E-Commerce or Electronic Commerce means buying and selling of goods,
products, or services over the internet.
• E-commerce is also known as electronic commerce or internet commerce.
• These services provided online over the internet network. Transaction of
money, funds, and data are also considered as E-commerce.
• The standard definition of E-commerce is a commercial transaction which is
happened over the internet.
• Online stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are
examples of E-commerce websites.
• E-commerce refers to paperless exchange of business information using
following ways.
• Electronic Data Exchange (EDI)
• Electronic Mail (e-mail)
• Electronic Bulletin Boards
• Electronic Fund Transfer (EFT)
• Other Network-based technologies
• E-commerce is subdivided into three categories:
• Business to business or B2B (Cisco),
• Business to consumer or B2C (Amazon), and
• Consumer to consumer or C2C (eBay)
FEATURES
• Ubiquity
• Global reach
• Universal standards
• Richness
• Interactivity
• Personalization
• Information density
• Social technology
• User-Generated Content
• Ubiquity: e-Commerce is ubiquitous, It is available just about everywhere and at all times by using internet and Wi-Fi
hotspot such as airport, coffee cafe and hill station places.
• Global reach: E-Commerce Technology seamlessly stretches across traditional cultural and national
boundaries and enables worldwide access to the client. E-Commerce website has ability to translate the multilingual
websites as well as allow the access to visitors all over the world
• Universal standards: The technical standards of the Internet are shared by all of the nations in the world.
• Richness: Users can access and utilize text messages and visual and audio components to send and receive information.
• Interactivity: E-commerce technologies allow two-way communication between the merchant and the consumer. As a
result, e-Commerce technologies can adjust to each individual’s experience.
• Personalization: Technologies within e-Commerce allow for the personalization and customization of marketing
messages that groups or individuals receive.
• Information density: The use of e-Commerce reduces the cost to store, process and communicate information,
• Social technology: E-Commerce technology has tie up the social media networking application to provide the best
source of content sharing technology and e-Marketing systems. You can share your content or data easily in just one
click.
• User-Generated Content: When an individual updates his status on a social networking account, he may also mention
a product or company by name, which creates word-of-mouth advertising.
EVOLUTION OF E-COMMERCE
• A combination of technological innovation and regulatory reform has helped in the
evolution of e-commerce.
• In the early 1970s, e-commerce applications were first developed with innovations like
• Electronic Funds Transfer (EFT) to electronically transfer funds from one organization
to another.
• However, these applications were used in only a few corporations, financial institutions
and other businesses.
• Later, Electronic Data Interchange (EDI) was introduced to electronically transfer
documents which extended electronic transfers from financial transactions to other
types of transaction processing.
• Global Perspective
• 1960s: Development of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).
• 1989: Tim Berners-Lee invents the World Wide Web.
• 1994: First secure online purchase is made using encryption technology (a CD by Sting).
• 1995: Amazon is founded by Jeff Bezos as an online bookstore.
• 1995: eBay is launched by Pierre Omidyar as an online auction site.
• 1998: PayPal is founded, providing a secure online payment system.
• 1999: Alibaba is founded by Jack Ma in China.
• 2007: The first iPhone is launched, accelerating the growth of mobile commerce.
• 2010: Instagram is launched, later integrating shopping features to promote social commerce.
• 2013: Alibaba's Singles' Day becomes the world's largest online shopping event.
• 2015: Amazon introduces same-day delivery through Amazon Prime Now.
• 2020: COVID-19 pandemic significantly boosts global e-commerce, with increased demand for online shopping and
delivery services.
• Perspective on India
• 1999: Launch of early Indian e-commerce websites like Rediff, Indiatimes, and Sify.
• 2007: Flipkart is founded by Sachin and Binny Bansal as an online bookstore.
• 2010: Snapdeal is launched, focusing on deals and discounts.
• 2013: Amazon India begins operations.
• 2014: Alibaba invests in Indian e-commerce companies like Paytm and Snapdeal.
• 2015: Introduction of the Unified Payments Interface (UPI) by NPCI.
• 2016: Indian government launches the Digital India initiative.
• 2017: Implementation of the Goods and Services Tax (GST) simplifies taxation for e-commerce businesses.
• 2018: Walmart acquires a 77% stake in Flipkart for $16 billion.
• 2019: Growth of vertical e-commerce platforms like Myntra (fashion), FirstCry (baby products), and Nykaa
(beauty and cosmetics).
• 2020: COVID-19 pandemic accelerates e-commerce growth in India, particularly in online grocery and
healthcare sales.
• 2021: Rise of quick commerce platforms like Zepto and Blinkit, offering rapid delivery services.
• 2022: Continued technological advancements with AI, AR, and blockchain integration in e-commerce.
TYPES OF E-COMMERCE
• E-commerce can be categorised
in four ways:
1. B2B (Business to Business): IndiaMART
2. B2C (Business to Consumer): Flipkart,
Amazon India
3. C2C (Consumer to Consumer): OLX
4. C2B (Consumer to Business): Freelancers
on Upwork, Freelancer
B2B (BUSINESS TO BUSINESS)
• It is a new name given to EDI.
• As the name suggests, it is a business
platform involving two independent or even
dependent business entities.
• In B2B version of online transaction(s) the
manufacturing organization takes a lead in
setting up a business platform.
• This platform acts a business communication
channel between the manufacturing/software
developer entity and its vendors/suppliers
B2C (BUSINESS TO CONSUMER)
• It refers to a business platform, involving a
business entity and consumers.
• It is a retail version of e-commerce known as
e-tailing. Selling goods or services through
web based shops.
• It is the most popular model of e-commerce
as it has helped moving commercial
transactions from public domain to private
domain.
• B2C is about creating a better offline
shopping experience – online.
C2C (CONSUMER TO CONSUMER)
• It represents a consumer business platform,
which is for the consumer, by the consumer.
• It is referred to as online ‘consumer-to-
consumer’ auctions. Almost anything can be
offered on such online platforms.
• A buyer who wants a particular item enters
the maximum amount he is prepared to pay.
• This remains a secret to other bidders while
auction site’s computers monitor the bidding.
Highest offer is accepted until the end of
auction.
C2B (CONSUMER TO BUSINESS)
• It is an innovative retail-marketing platform,
where a business entity offers a variety of
packages or options to entice the online
customer.
• Here the business entity/service provider bids
for consumer.
• It is often referred to as ‘reverse auction’.Such
models are widely prevalent in tourism and
travel industry.
• The tour operators, hotels and airlines not
only give deep discounts to the consumers but
also give them option to negotiate the prices.
E-COMMERCE AND E-BUSINESS
• Some use the terms e-commerce and e-Business in an interchangeable manner,
but these terms refer to different concepts.
• The concept where ICT is used in buying and selling of goods or services
between organizations and in Business-to-Consumer (B2C) transactions is
known as e-commerce.
• On the other hand, the concept where ICT is used to enhance the key business
processes through the facilities available on the Internet is known as e-Business.
It comprises of any process by which an organization conducts business over a
computer network.
 Aspect E-commerce E-business
Conducting all aspects of business over the
Definition Buying and selling of goods and services online
internet
Broad, includes e-commerce and other online
Scope Narrow, focused on transactions
business operations
Online storefronts, payment gateways, shopping E-commerce components, CRM, SCM, ERP, EDI,
Components
carts, customer support internal communications
Focus Transactional, sales and purchase processes Operational, encompassing all business activities

Customer relationship management (CRM),

Online retail (B2C), online marketplaces (C2C), supply chain management (SCM), enterprise
Examples of
B2B transactions, digital goods and services, resource planning (ERP), online marketing and
Activities
mobile commerce (M-commerce) advertising, electronic data interchange (EDI),
knowledge management systems
Business Both external (customer-facing) and internal
Mainly external (customer-facing)
Processes (operations)
Amazon (online retail), eBay (online marketplace), Amazon (retail, AWS), Dell (integrated SCM),
Examples
Alibaba (B2B transactions) General Electric (global operations, CRM, SCM)
Streamlining overall business operations using
Objective Facilitating online transactions
digital technologies
THE THREE MAIN PROCESSES ENHANCED IN E-BUSINESS ARE:
1. Production processes, which include: • Internal management processes, which
• Procurement include:
• Ordering and replenishment of stocks • Employee services
• Processing of payments • Employee training
• Electronic links with suppliers • Internal information-sharing
• Production control processes
• Video conferencing
2. Customer-focused processes, which • Recruiting
include:
• Promotional and marketing efforts
• Selling over the Internet
• Processing of customers’ purchase orders and
payments
• Customer support
E-COMMERCE VERSUS TRADITIONAL BUSINESS
 Point of
E-commerce Traditional Commerce
Difference

E-commerce is cost effective. The cost incurred on middlemen is Cost has to be incurred for the role of middlemen to
eliminated as there is direct link between the business and the sell the company’s products. The total overhead cost is
Cost Effective customers. . The total overhead cost required to run e- business is more. Running a traditional business require a head
comparatively less. Running an e-business require only a head office with several branches to cater to the needs of
office. Overhead cost can be eliminated by hosting a website. customers situated in different places.

A lot of valuable time for both the consumers and business is

Time saved. A product can be ordered and the transaction can be It takes a lot of time to complete a transaction.
completed in few minutes through internet.
It provides convenience to both customers and business. It
provides better connectivity for its prospective and potential
It is not so convenient method as that of E-commerce.
customers as the website can be accessed virtually from anywhere,
Convenience Customers have to move away from their home or
anytime through internet. It is not necessary to move away from
work place to locate and purchase a desired product.
their work place or home to locate and purchase a desired
product.
It is easy to expand the size of the market from regional to It may not be easy to expand the size of the market
international level. By hosting a website, a business can penetrate from regional to national level. Business organizations
Accessibility
into global market. It is quite easy to attract customers from have to incur a lot of expenses to enter international
global markets at a marginal cost. market.
 Point of
E-commerce Traditional Commerce
Difference
It takes a lot of time and money to introduce a new
Introduction It is easy to introduce a product on the website and get the
product and analyse the response of the customers.
of new immediate feedback of the customers. Based on the response, the
Initially, cost has to be incurred to carry out pilot
product products can be redefined and modified for a successful launch.
surveys to understand the taste of the customers.
The cost incurred on the middlemen, overhead,
It helps the organization to enjoy greater profits by increasing
Profit inventory and limited sales pulls down the profit in
sales, cutting cost and streamlining operating processes.
traditional commerce.
Physical It is possible to physically inspect goods before the
It does not allow physical inspection of goods.
Inspection purchase.
Time Round the clock service is available. Business is open only for a limited time.

It not suitable for perishable goods and high value items such as
Product
jewellery and antiques. It is mostly suitable for purchasing tickets, It is suitable for perishables and ‘touch and feel’ items.
suitability
books, music and software.

It requires technically qualified staff with an aptitude to update

Human It does not have such problems associated with human
themselves in the ever changing world. It has difficulty in
resources resources.
recruiting and retaining talented people.
Customer The interaction between the business and the customer is screen- The interaction between the business and the
interaction to-face. consumer is a face-to-face.
Automated processing of business transactions helps to minimize There are chances of clerical errors to occur as there is
Process
the clerical errors. manual processing of business transactions.
Business
Business relationship is characterized by end-to-end. Business relationship is vertical or linear.
relationship
 Point of Difference E-commerce Traditional Commerce

Lot of cyber frauds take place in e-commerce

transaction. People generally fear to give credit
Fraud in traditional commerce is comparatively
card information. Lack of physical presence in
Fraud less as there is personal interaction between the
markets and unclear legal issues give loopholes
buyer and the seller.
for frauds to take place in e- business
transactions.

Little dependency on person to person Heavy dependency on information exchange

information exchange. It provides a universal from person to person. No uniform platform for
Information sharing
platform to support business activities across information sharing as it depends heavily on
the globe. personal communication.

Communication can be done in asynchronous

Communication is done in synchronous way.
Method of way. Electronics system automatically handles
Manual intervention is required for each
Communication when to pass communication to required
communication or transaction.
person or do the transactions.
A uniform strategy can be easily established It is difficult to establish and maintain standard
Strategy
and maintain. practices.
M-COMMERCE
• M-Commerce (Mobile Commerce) refers to the buying and selling of goods
and services through wireless handheld devices such as smartphones and
tablets.
• This form of commerce enables users to access online shopping platforms
without needing to use a desktop computer.
• Mobile commerce includes mobile banking, in-app purchases, mobile payment
options, and location-based services.
PURPOSE OF USING M-COMMERCE
• Convenience • Examples of M-Commerce
• Speed Applications
• E-commerce Apps: Amazon, Flipkart,
• Personalization eBay
• Broader Reach • Mobile Payment Apps: PayPal, Google
Pay, Apple Pay
• Enhanced User Experience • Banking Apps: Chase Mobile, HDFC
Bank Mobile Banking, ICICI Bank
iMobile
• Service Apps: Uber, Ola, Swiggy, Zomato
• Social Commerce: Instagram Shopping,
Facebook Marketplace, Pinterest Shop
• Convenience
• Allows users to shop anytime and anywhere, providing greater flexibility and ease of access.
• Facilitates on-the-go transactions, which are particularly useful for busy individuals.
• Speed
• Faster transaction processes compared to traditional e-commerce due to optimized mobile interfaces.
• Quick access to information and real-time updates.
• Personalization
• Utilizes data and AI to provide personalized recommendations and offers based on user behavior and preferences.
• Enhanced customer engagement through targeted marketing and push notifications.
• Broader Reach
• Enables businesses to reach a larger audience as smartphone usage continues to grow.
• Increases market penetration in regions with limited access to traditional computing devices.
• Enhanced User Experience
• Mobile apps and responsive websites offer user-friendly interfaces and better navigation.
• Integration of features like voice search, augmented reality (AR), and mobile wallets.
HOW M-COMMERCE IS DONE
• Mobile Websites
• Mobile Applications
• Mobile Payment Systems
• In-App Purchases
• SMS and MMS Commerce
• QR Codes and NFC
• Social Media Integration
• Location-Based Services
• Mobile Websites
• Businesses develop mobile-friendly websites that are optimized for smaller screens and touch inputs.
• Responsive design ensures a seamless experience across different devices.

• Mobile Applications
• Companies create dedicated mobile apps for iOS and Android platforms.
• Apps provide a more streamlined and feature-rich experience compared to mobile websites.

• Mobile Payment Systems

• Integration of mobile payment options like Apple Pay, Google Pay, and Samsung Pay.
• Use of mobile wallets such as Paytm, PhonePe, and MobiKwik for secure and quick transactions.

• In-App Purchases
• Apps allow users to make purchases directly within the application, common in gaming, media, and
subscription services.
• Facilitates seamless and impulse buying experiences.
• SMS and MMS Commerce
• Use of text messages (SMS) and multimedia messages (MMS) for marketing, promotions, and transaction
notifications.
• SMS-based payment systems allow users to make purchases via text messages.

• QR Codes and NFC

• QR codes enable users to scan and access product information, make payments, and avail discounts.
• Near Field Communication (NFC) technology allows for contactless payments and data exchange between
devices.

• Social Media Integration

• Integration with social media platforms like Instagram, Facebook, and Pinterest to enable direct shopping.
• Use of social commerce features such as shoppable posts and stories.

• Location-Based Services
• Use of GPS technology to provide location-specific offers, services, and recommendations.
• Enhances the relevance and personalization of marketing efforts.
FEATURES OF E-COMMERCE
• Easy and Any Time Access
• No-Cash Transaction
• Easy Marketing for Organizations
• Home Delivery
• Cost Effective
• Online Presence
• Global Reach
• Mobile Compatibility
• Secure Transactions
• Variety of Payment Options
• Inventory Management
• Customer Support
• Data Analytics
• Easy and Any Time Access: E-commerce platforms are accessible 24/7, allowing customers to browse and make purchases at
any time from anywhere with an internet connection. This makes it easy for customers to shop at their convenience, without
needing to physically visit a store during business hours.
• No-Cash Transaction: E-commerce transactions can be made using electronic payment methods such as credit cards, debit
cards, digital wallets, and other online payment systems. This eliminates the need for customers to carry cash and reduces the
risk of theft.
• Easy Marketing for Organizations: E-commerce platforms offer a range of marketing tools to help businesses promote their
products and services. This includes targeted advertising, email marketing, social media marketing, and Search Engine
Optimization (SEO). These tools make it easier for businesses to reach their target audience and drive sales.
• Home Delivery: E-commerce platforms offer home delivery of products, allowing customers to receive their purchases at their
doorstep. This makes shopping more convenient for customers who may not have the time or ability to visit physical stores.
• Cost Effective: E-commerce platforms can be more cost-effective for businesses compared to traditional brick-and-mortar stores.
This is because they have lower overhead costs such as rent, utilities, and staffing. E-commerce platforms also allow businesses
to reach a wider audience without needing to invest in physical stores in multiple locations. Additionally, customers can easily
compare prices and find deals online, which can help drive sales for businesses.
• Online Presence: E-commerce businesses have an online presence, which is essential for conducting transactions over the
internet. This includes having a website or social media account where customers can browse and purchase products or
services.
• Global Reach: E-commerce has a global reach, which means that businesses can sell products and services to customers
from anywhere in the world. This opens up a vast market for businesses and increases their potential for growth.
• Mobile Compatibility: With the increasing use of mobile devices, e-commerce businesses must have websites and
platforms that are mobile-friendly. This means that customers can access and purchase products or services from their
mobile devices.
• Secure Transactions: E-commerce transactions must be secure to protect the personal and financial information of
customers. This is achieved through secure payment gateways, SSL certificates, and other security measures.
• Variety of Payment Options: E-commerce businesses offer customers a variety of payment options, such as credit cards,
PayPal, and other electronic payment systems. This makes it easy for customers to complete transactions and increases
the likelihood of completing sales.
• Inventory Management: E-commerce businesses must have an efficient inventory management system to ensure that
products are in stock and ready for shipping. This includes tracking inventory levels, reordering products, and managing
returns.
• Customer Support: E-commerce businesses must have a customer support system in place to address customer queries
and concerns. This includes offering online chat support, email support, or phone support.
• Data Analytics: E-commerce businesses can use data analytics tools to gather insights into customer behavior and
preferences. This can be used to optimize marketing strategies, improve customer experiences, and increase sales.
IMPORTANCE & ADVANTAGES OF E-COMMERCE
• The advantages of e-commerce can be broadly classified into three
major categories:
• From Organizations Perspective
• From Customers Perspective
• From Social Perspective
FROM ORGANIZATIONS' PERSPECTIVE

• Increased Reach
• Reduced Costs
• Improved Efficiency
• Better Customer Data
• Increased Sales
• 24/7 Availability
• Personalization
• Easy Inventory Management
FROM CUSTOMERS PERSPECTIVE
• Convenience
• Wide Selection of Products
• Lower Prices
• Personalization
• Easy Access to Information
• Easy Returns and Exchanges
• Improved Customer Service
FROM A SOCIAL PERSPECTIVE
• Increased Access to Goods and Services
• Job Creation
• Environmental Benefits
• Increased Competition
• Improved Customer Experiences
• Access to Information
FROM ORGANIZATIONS' PERSPECTIVE

• Increased Reach: E-commerce allows organizations to reach a global audience and expand their customer base beyond their
local market. This opens up new business opportunities and increases the potential for growth.
• Reduced Costs: E-commerce reduces costs associated with traditional brick-and-mortar stores, such as rent, utilities, and
staff salaries. Organizations can operate with a smaller team and have lower overhead costs, resulting in higher profit margins.
• Improved Efficiency: E-commerce streamlines the buying and selling process, reducing the time and resources required to
complete transactions. This improves efficiency and productivity, allowing organizations to focus on other areas of their
business.
• Better Customer Data: E-commerce allows organizations to gather data on customer behavior and preferences. This data
can be used to create targeted marketing campaigns and improve customer experiences.
• Increased Sales: E-commerce makes it easy for customers to make purchases, resulting in increased sales. Organizations can
offer a variety of payment options, such as credit cards and electronic payment systems, making it easy for customers to
complete transactions.
• 24/7 Availability: E-commerce allows organizations to be available 24/7, providing customers with the flexibility to make
purchases at any time. This results in increased sales and customer satisfaction.
• Personalization: E-commerce allows organizations to offer personalized products and services based on customer
preferences and behavior. This results in increased customer loyalty and repeat business.
• Easy Inventory Management: E-commerce allows organizations to easily manage their inventory, reducing the risk of
overstocking or stockouts. This results in more efficient inventory management and increased profitability.
FROM CUSTOMERS PERSPECTIVE

• Convenience: E-commerce is highly convenient for customers, as they can shop from the comfort of their homes or on-the-go
using their mobile devices. Customers can shop at any time of day without having to worry about store hours or location.
• Wide Selection of Products: E-commerce offers customers access to a wider selection of products compared to traditional
stores. Customers can shop from multiple stores and compare prices and features before making a purchase decision.
• Lower Prices: E-commerce businesses often have lower overhead costs than traditional stores, which allows them to offer lower
prices to customers. Customers can save money by shopping online, especially when taking advantage of promotions and
discounts.
• Personalization: E-commerce businesses can use data analytics to personalize the shopping experience for customers. This
includes offering personalized product recommendations, customized promotions, and targeted advertising based on customer
preferences and behavior.
• Easy Access to Information: E-commerce businesses provide customers with easy access to product information, reviews, and
ratings. This enables customers to make informed purchase decisions and reduces the risk of buying products that don't meet
their expectations.
• Easy Returns and Exchanges: E-commerce businesses often have easy and convenient return and exchange policies. This
reduces the risk of purchasing a product that doesn't meet expectations and makes it easier for customers to buy with
confidence.
• Improved Customer Service: E-commerce businesses often offer multiple channels for customer support, including email, chat,
and phone. This enables customers to easily get in touch with customer service representatives to resolve any issues or answer
questions.
FROM A SOCIAL PERSPECTIVE

• Increased Access to Goods and Services: E-commerce has made it easier for people to access goods and services,
regardless of their location or physical ability. This is particularly beneficial for individuals who live in rural or remote
areas or who have limited mobility, as they can purchase products and services online and have them delivered to their
doorstep.
• Job Creation: E-commerce has created new job opportunities in areas such as web development, online marketing,
logistics, and customer support. This has contributed to economic growth and improved standards of living for
individuals and families.
• Environmental Benefits: E-commerce has the potential to reduce carbon emissions by minimizing the need for physical
transportation of goods. E-commerce businesses can consolidate orders and use more efficient delivery methods, such
as delivery by drone or electric vehicle.
• Increased Competition: E-commerce has increased competition among businesses, which has led to lower prices for
consumers. This has made it easier for people to access goods and services that were previously out of reach due to
high prices.
• Improved Customer Experiences: E-commerce businesses have invested heavily in improving customer experiences,
resulting in faster and more convenient transactions, personalized recommendations, and efficient customer support.
This has led to higher levels of customer satisfaction and loyalty.
• Access to Information: E-commerce has made it easier for consumers to access information about products and
services, such as reviews, ratings, and product specifications. This has empowered consumers to make more informed
decisions and avoid products and services that do not meet their needs.
LIMITATION OR DISADVANTAGES OF E-COMMERCE

• The limitations or disadvantages of e-commerce can be classified

into three main categories:
• Technical limitation
• Non-technical limitation
• Societal limitation
TECHNICAL LIMITATIONS
• Slow Internet Speeds
• Server Crashes
• Security Vulnerabilities
• Payment Gateway Issues
• Compatibility Issues
• Technical Support
• Maintenance and Upgrades
NON-TECHNICAL LIMITATION
• Lack of Trust
• Resistance to Change
• Legal and Regulatory Hurdles
• Cultural Differences
• Security Concerns
• Customer Service Issues
SOCIETAL LIMITATION
• Displacement of Traditional Businesses
• Concentration of Power
• Labour Standards
• Digital Divide
• Environmental Impact
• Security and Privacy Concerns
TECHNICAL LIMITATIONS

• Slow Internet Speeds: Slow internet speeds can impact the performance of e-commerce websites, making it difficult for
customers to browse and purchase products. This can result in lost sales and reduced customer satisfaction.
• Server Crashes: E-commerce websites rely on servers to process transactions and manage inventory. Server crashes can
result in website downtime and loss of sales, as well as damage to the reputation of the business.
• Security Vulnerabilities: E-commerce websites are vulnerable to cyber attacks, such as hacking, phishing, and malware.
Security vulnerabilities can compromise sensitive customer data, resulting in financial losses and damage to the
reputation of the business.
• Payment Gateway Issues: Payment gateways are the tools that allow e-commerce websites to accept online payments.
Technical issues with payment gateways, such as downtime or errors, can result in lost sales and customer frustration.
• Compatibility Issues: E-commerce websites must be compatible with a wide range of devices, browsers, and operating
systems. Compatibility issues can impact the user experience and result in lost sales.
• Technical Support: E-commerce businesses must have a technical support system in place to address issues related to
website functionality, such as broken links, slow loading times, or error messages.
• Maintenance and Upgrades: E-commerce websites require regular maintenance and upgrades to ensure that they
remain secure, up-to-date, and functional. Failure to perform regular maintenance and upgrades can result in technical
issues and compromised security.
NON-TECHNICAL LIMITATION

• Lack of Trust: One of the primary non-technical limitations of e-commerce is the lack of trust among consumers. This
is due to concerns about the security of online transactions, fraud, and identity theft. This lack of trust can lead to
lower sales, as consumers are hesitant to share their personal and financial information online.
• Resistance to Change: Another non-technical limitation of e-commerce is resistance to change. Some consumers are
used to traditional brick-and-mortar stores and are reluctant to shop online. This can be due to factors such as the need
to see and touch products before purchasing them or a lack of familiarity with online shopping platforms.
• Legal and Regulatory Hurdles: E-commerce is subject to a complex web of legal and regulatory requirements, which
can vary by jurisdiction. This can make it difficult for businesses to comply with all the necessary rules and regulations.
Examples of regulatory hurdles include data privacy laws, consumer protection laws, and taxes.
• Cultural Differences: E-commerce businesses that operate across different cultures and countries must be aware of
cultural differences in consumer behavior, language, and preferences. Failure to take these differences into account can
lead to misunderstandings and lower sales.
• Security Concerns: E-commerce platforms are vulnerable to cyber-attacks, which can compromise sensitive customer
data. This can lead to a loss of trust among consumers and damage to the reputation of the business.
• Customer Service Issues: E-commerce businesses must provide efficient and effective customer service to address
customer concerns and complaints. Failure to do so can lead to negative reviews and damage to the reputation of the
business.
SOCIETAL LIMITATION

• Displacement of Traditional Businesses: E-commerce has disrupted traditional businesses such as brick-and-mortar
retail stores, leading to store closures and job losses. This has had a significant impact on local economies, particularly
in areas where retail jobs are a major source of employment.
• Concentration of Power: E-commerce is dominated by a few large companies, such as Amazon, Alibaba, and eBay.
This concentration of power has raised concerns about competition and the potential for monopolies, which can lead to
higher prices for consumers and limited choice.
• Labour Standards: E-commerce has led to the creation of new jobs, but these jobs are often low-paying and lack
benefits. Additionally, the rise of gig economy platforms has led to concerns about labour standards, such as job
security and fair pay.
• Digital Divide: E-commerce requires access to the internet and digital technologies, which can create a digital divide
between those who have access and those who do not. This can limit opportunities for individuals and communities
that lack access to these technologies.
• Environmental Impact: While e-commerce has the potential to reduce carbon emissions by minimizing the need for
physical transportation of goods, it also has environmental impacts, such as increased packaging waste and energy
consumption from data centers.
• Security and Privacy Concerns: E-commerce transactions involve the exchange of sensitive personal and financial
information, which can be vulnerable to cyberattacks and data breaches. This has raised concerns about privacy and
security for consumers.
ROLE OF ECOMMERCE IN MODERN WORLD
• Global Reach • Efficiency in Supply Chain
• Convenience Management
• Cost Efficiency • Impact on Traditional Retail
• Personalization and Customer • Economic Growth
Experience • Consumer Empowerment
• Variety and Availability • Sustainability
• Market Competition • Innovation and Technology
Integration
ROLE OF ECOMMERCE IN MODERN WORLD

• Global Reach: E-commerce platforms allow businesses to reach customers across the globe, breaking
down geographical barriers and enabling even small businesses to access international markets.
• Convenience: Consumers can shop anytime and anywhere with an internet connection, providing
unparalleled convenience and flexibility. This has led to a significant shift from traditional brick-and-
mortar stores to online shopping.
• Cost Efficiency: E-commerce reduces operational costs for businesses by minimizing the need for physical
retail spaces and enabling automated processes. This often translates into lower prices for consumers.
• Personalization and Customer Experience: Advanced data analytics and AI technologies allow e-
commerce platforms to offer personalized shopping experiences, recommending products based on
individual preferences and previous purchases.
• Variety and Availability: Online stores can offer a wider range of products than physical stores, including
niche items that might not be available locally. This variety enhances the shopping experience for
consumers.
• Market Competition: E-commerce has intensified competition among retailers, driving innovation and
leading to better products and services. It also provides consumers with more choices and competitive
pricing.
• Efficiency in Supply Chain Management: E-commerce has streamlined supply chain operations through
improved inventory management, real-time tracking, and efficient logistics, reducing delivery times and
enhancing customer satisfaction.
• Impact on Traditional Retail: The rise of e-commerce has challenged traditional retail models, leading to the
closure of many physical stores but also encouraging the development of hybrid models that integrate online
and offline experiences.
• Economic Growth: E-commerce contributes significantly to economic growth by creating jobs in various sectors,
including technology, logistics, and customer service. It also stimulates other industries, such as digital marketing
and financial services.
• Consumer Empowerment: E-commerce platforms empower consumers with information, enabling them to
compare products, read reviews, and make informed purchasing decisions. This transparency fosters trust and
loyalty.
• Sustainability: E-commerce has the potential to support sustainable practices by reducing the need for physical
stores and promoting the use of digital products and services. However, it also poses challenges, such as
increased packaging waste and the environmental impact of delivery logistics.
• Innovation and Technology Integration: The growth of e-commerce drives innovation in various technologies,
such as mobile apps, payment systems, and augmented reality, enhancing the overall shopping experience.
TOOLS OF E-COMMERCE
• Websites
• E-commerce websites serve as the primary platform where businesses showcase
their products or services to customers. These sites include features such as product
catalogs, search functionality, shopping carts, and secure payment gateways to
facilitate online transactions.
• Portals
• E-commerce portals are comprehensive platforms that aggregate multiple vendors
or service providers, offering a wide range of products or services under one virtual
roof. Examples include marketplace portals like Amazon and eBay, which provide
customers with access to various sellers, competitive pricing, and diverse product
choices.
TYPES OF PORTALS
• Horizontal Portals: These portals provide a wide range of services and content across various industries
and topics. Examples include Yahoo and MSN, which offer news, email, search, and other services.
• Vertical Portals: These portals focus on a specific industry, market, or interest. Examples include WebMD
for healthcare and Edmunds for automotive information.
• Marketplace Portals: These portals aggregate multiple vendors to offer a wide range of products and
services. Examples include Amazon, eBay, and Alibaba.
• Corporate Portals: These are used within organizations to provide employees, customers, and partners
with access to company information, services, and applications. Examples include intranet portals and
customer relationship management (CRM) systems.
• Community Portals: These portals serve specific communities or interest groups, providing a platform for
members to interact and share information. Examples include Reddit and Stack Overflow.
BENEFITS OF PORTALS
• Centralized Access: Portals provide a single point of access to a variety of
resources and services, making it easier for users to find what they need.
• Increased Efficiency: By aggregating information and services, portals
streamline processes and reduce the time users spend searching for information.
• Enhanced User Experience: Customizable and personalized content improves
the user experience, making it more relevant and engaging.
FEATURES OF PORTALS
• Personalization: Users can customize their portal experience based on preferences, roles, and needs.
• Search Functionality: Robust search capabilities help users quickly find relevant information and
services.
• Content Management: Tools for creating, publishing, and managing content ensure that
information is up-to-date and accurate.
• Integration: Portals integrate with other systems and applications, providing seamless access to a
wide range of services.
• Security: Strong security measures protect sensitive information and ensure that only authorized
users have access.
• Analytics: Reporting and analytics tools provide insights into user behavior and portal performance.
INTELLIGENT WEBSITES (TYPES)
• E-commerce Websites: These sites enable online shopping and transactions, offering
features like product catalogs, shopping carts, and secure payment gateways.
• Content Management Systems (CMS): These platforms allow users to create,
manage, and publish content without needing extensive technical knowledge.
• Customer Relationship Management (CRM) Websites: These sites help businesses
manage customer interactions and data throughout the customer lifecycle.
• Knowledge Management Websites: These platforms provide tools for capturing,
organizing, and sharing knowledge within an organization or community.
• Social Networking Websites: These sites facilitate social interaction and content
sharing among users. Examples include Facebook and LinkedIn.
REQUIREMENTS/OBJECTIVES
• User-Friendly Interface: Intuitive design and easy navigation are essential for a positive user
experience.
• Responsive Design: Websites must be accessible on various devices, including desktops, tablets,
and smartphones.
• Speed and Performance: Fast loading times and smooth performance are critical to retain users
and reduce bounce rates.
• Security: Robust security measures, including SSL certificates and data encryption, protect user
data and ensure safe transactions.
• Scalability: The website should be able to handle increased traffic and content without
compromising performance.
• Accessibility: Compliance with accessibility standards ensures that the website is usable by
people with disabilities.
QUANTUM OF E-COMMERCE
Learning Outcomes:
Students will be able to summarize trends and impact of e-commerce on
businesses.
CONTENT
• Growth in E-commerce
• Social Commerce
• Recent trends in India
• Advertising in social media
• Digital Marketing
• Impact of E-commerce on businesses
THE GROWTH OF E-COMMERCE
• Increasing Internet Penetration
• Rise of Mobile Devices
• Improved Logistics and Delivery
• Shift in Consumer Behavior
• Adoption by Traditional Retailers
QUICK COMMERCE
• Quick commerce, altering India's retail and last-mile delivery landscape, stands out as a
prominent trend in the country's e-commerce sector leveraging the widespread
availability of mobile internet and the rise of e-commerce Quick commerce is
challenging traditional retail concepts with a focus on rapid deliveries.
• The gross merchandise value (GMV) of quick commerce in India reached US$ 2.3
billion in 2023, rising by more than 70% over the previous year.
• A number of players have emerged from such quick growth, including the extensions
of established platforms like Zomato-owned Blinkit, Swiggy Instamart, Dunzo Daily,
and Country Delight, and newcomers such as Zepto.
• Projections indicate a robust compound annual growth rate (CAGR) of 27.9% for the
Indian quick commerce industry between FY22 and FY27.
Process flow of instant delivery platforms
SOCIAL COMMERCE
• Social commerce refers to the use of social media platforms such as Facebook, Instagram, and
Twitter to facilitate online shopping and transactions.
• It combines the social aspect of networking with the ability to purchase products and services,
allowing users to share, recommend, and purchase items within the same platform.
• It is a form of e-commerce that relies heavily on user-generated content, social interactions, and
social proof to drive sales.
• According to a Bain & Company report, social commerce in India (in terms of gross
merchandise value) was estimated at ~ US$ 2 billion in 2020 and is projected to reach US$ 16-
20 billion by 2025 and US$ 60-70 billion by 2030.
• Share of social commerce in India’s e-commerce market (US$ 38 billion in 2020) is expected to
increase from the existing 1-2% to 4-5% of the projected US$ 140 billion market by 2025.
KEY FEATURES OF SOCIAL COMMERCE
• Product Discovery
• Social Proof
• Seamless Purchase Process
• Personalized Experiences
• Social Integration
• User-Generated Content
Product Discovery
o Social commerce platforms provide users with the ability to discover products in a seamless and personalized manner. By
leveraging user data, these platforms can recommend products based on search and purchase history.
Social Proof
o Social commerce platforms enable users to share their experiences with products, providing a powerful form of social proof.
This helps potential customers make informed decisions and boosts confidence in product quality.
Seamless Purchase Process
o Users can complete purchases within the platform without having to leave the app or website, making the purchase process
more convenient and streamlined.
Personalized Experiences
o Social commerce platforms use data and machine learning algorithms to provide personalized experiences, including product
recommendations and targeted advertising.
Social Integration
o These platforms are deeply integrated with social media, enabling users to share their purchases and experiences with their
social network, generating buzz and increasing brand awareness.
User-Generated Content
o Social commerce platforms often feature user-generated content, such as product reviews and ratings, providing valuable
insights into product quality and overall customer experience.
TRENDS IN SOCIAL COMMERCE
• Social Commerce Emerging as a New Business Model for Small and Midsized
Businesses
• Key SMEs Taking the Lead
• Evolving Business Models Such as Reselling and Group Buying
• Social Commerce Players Vying for a Bigger Market Pie
• The ‘Make in India’ Initiative

India's Emerging Social Commerce Poised For Growth | IBEF

• Social Commerce Emerging as a New Business Model for Small and Midsized Businesses
Social commerce is evolving as a communication and transaction model for small and midsized companies, allowing efficient online
product discovery and easier conversations with brands.
• Key SMEs Taking the Lead
Key SMEs are leveraging social commerce to expand in India and globally, focusing on creating new business opportunities.
Examples include Everything Mom Made, a skin care brand, and DOODLAGE, a fashion brand that grew threefold during the
COVID-19 pandemic.
• Evolving Business Models Such as Reselling and Group Buying
Business models like reselling and group buying have evolved in social commerce.
Meesho, a social commerce platform, follows a reselling model. DealShare, a start-up, sources goods from local producers and sells
them via an app, offering discounts through WhatsApp group referrals.
• Social Commerce Players Vying for a Bigger Market Pie
Social commerce players are creating value through seamless social media shopping experiences and development opportunities for
resellers and suppliers.
According to RedSeer Consulting, social commerce players are expected to capture ~5% of India's e-commerce market by 2025,
growing at a CAGR of 65%.
• The ‘Make in India’ Initiative
The ‘Aatmanirbhar Bharat’ initiative is bolstering the social commerce industry by allowing domestic producers to transform their
business strategies and shift to online deliveries.
The ‘#VocalforLocal’ movement is encouraging technological innovations, making the country competitive and improving its global
economic engagement.
RECENT TRENDS IN INDIA
• Rising Growth Trend
• Increase in Venture Capital Investment
• Start-up Companies
• Expansion into Non-Metropolitan India
• Free Door-to-Door Shipping
• Flexible Payment Options
• Emergence of Multiple Couriers
• Different Languages Beyond English
• Use of Artificial Intelligence (AI) for Personalization
• Rising Growth Trend:
E-commerce has grown exponentially in recent years, and this trend is set to continue. The convenience of shopping from home, the availability of a wide
range of products, and the ease of payment have made e-commerce a preferred choice for many shoppers.
• Increase in Venture Capital Investment:
The growth in e-commerce has also led to an increase in venture capital investment. Many start-up e-commerce companies have attracted significant
investment, and this trend is expected to continue as investors seek to capitalize on the growing market.
• Start-up Companies:
The rise of e-commerce has also led to the emergence of many start-up companies. These companies are using innovative strategies to attract customers
and differentiate themselves from established players.
• Expansion into Non-Metropolitan India:
One of the significant changes in the e-commerce industry is the expansion into non-metropolitan India. Companies are tapping into the growing middle
class in smaller towns and cities, offering them access to a wider range of products and services.
• Free Door-to-Door Shipping:
Many e-commerce companies are offering free door-to-door shipping, making it more convenient and cost-effective for customers to shop online.
• Flexible Payment Options:
E-commerce companies are also offering flexible payment options, such as Cash on Delivery (CoD), EMI (Equated Monthly Instalments) options, and
wallet payments to cater to the diverse needs of customers.
• Emergence of Multiple Couriers:
The emergence of multiple couriers has made it easier and more cost-effective for e-commerce companies to deliver products to customers across the
country.
• Different Languages Beyond English:
To cater to the diverse linguistic needs of customers, many e-commerce companies are offering their platforms in multiple languages beyond English.
• Use of Artificial Intelligence (AI) for Personalization:
Many e-commerce companies are using Artificial Intelligence (AI) to personalize the shopping experience for customers. By analyzing customer data and
behavior, these companies can offer customized product recommendations and promotions to each customer.
ADVERTISING IN SOCIAL MEDIA
• Digital Advertising in India | IBEF
Digital Media Spends across Industry Verticals
• Social Media Advertising - India | Statista Market Forecast
• Ad spending in the Social Media Advertising market is projected to reach US$1.3bn in 2024.
• Ad spending is expected to show an annual growth rate (CAGR 2024-2028) of 3.37%, resulting in
a projected market volume of US$1.5bn by 2028.
• In global comparison, most ad spending will be generated in the United States (US$76,400m in
2024).
• In the Social Media Advertising market, US$1.5bn of total ad spending will be generated through
mobile in 2028.
• In the Social Media Advertising market, the number of users is expected to amount to 1,240.0m
users by 2028.
OBJECTIVES OF ADVERTISING IN SOCIAL MEDIA

• Increase Brand Awareness

• Drive Website Traffic
• Generate Leads
• Boost Engagement
• Increase Sales
• Retargeting
• Brand Loyalty
PROCEDURES OF ADVERTISING ON SOCIAL MEDIA

• Choose Your Platform

• Define Your Target Audience
• Set Your Budget
• Create Your Ad
• Choose Your Ad Placement
• Launch Your Ad
• Measure Your Results
ADVANTAGES OF ADVERTISING IN SOCIAL MEDIA

• Targeted Advertising
• Cost-Effective
• Increased Brand Awareness
• Better Engagement
• Analytics and Insights
DISADVANTAGES OF ADVERTISING IN SOCIAL MEDIA

• Ad Blindness
• Ad Fatigue
• Limited Attention Span
• Limited Targeting
• Negative Feedback
• Brand Safety Concerns
• Increased Competition
• Cost
• Limited Control
DIGITAL MARKETING
• Digital marketing is the practice of promoting products, services, or brands
through digital channels such as search engines, social media, email, mobile
apps, and websites.
• It encompasses a wide range of tactics and strategies aimed at reaching and
engaging with target audiences online.
DIGITAL MARKETING TACTICS
• Search Engine Optimization (SEO)
• Pay-Per-Click Advertising (PPC)
• Social Media Marketing
• Content Marketing
• Email Marketing
• Influencer Marketing
• Affiliate Marketing
IMPACT OF E-COMMERCE ON BUSINESSES
• Economic Growth and Market Expansion
• Government Initiatives
• Technological Advancements
• Challenges
• Impact on MSMEs
• Growth of Online Marketplaces
• Employment and Entrepreneurship
• Consumer Behavior and Trends
• Cross-Border Trade
• Technological Integration
• Environmental and Social Impact
• Regulatory Environment
• Economic Growth and Market Expansion: E-commerce is substantially boosting the Indian economy. The sector's
rapid expansion is not just limited to metropolitan areas but is also penetrating tier-2 and tier-3 cities, enhancing market
accessibility and driving overall economic growth. The market size for online retail is expected to surpass $160 billion
by 2028, highlighting its critical role in India's economic development (India Brand Equity Foundation).
• Government Initiatives: The Indian government has introduced several initiatives to support the e-commerce
ecosystem. The 2024 budget includes measures such as the reduction of TDS rates, the abolition of the angel tax, and
the establishment of e-commerce export hubs. These efforts aim to level the playing field for smaller sellers, boost
startup investments, and enhance the efficiency of exporting products via e-commerce platforms (Commrz).
• Technological Advancements: Technological innovations are playing a pivotal role in the e-commerce boom. The
adoption of AI, chatbots for customer support, and advanced logistics solutions are improving the efficiency and
customer experience in the e-commerce sector. The Digital India initiative and the Open Network for Digital
Commerce (ONDC) are streamlining online transactions and expanding market reach (Indian Retailer).
• Challenges: Despite the positive outlook, several challenges persist. Issues such as inadequate skills for online selling,
data privacy concerns, and rising instances of online fraud need to be addressed to ensure sustainable growth. There are
regulatory hurdles and competition from international players which Indian e-commerce companies need to navigate
(Payoneer).
• Impact on MSMEs: Micro, Small, and Medium Enterprises (MSMEs) are significantly benefiting from the e-commerce
boom. These businesses now have enhanced access to a larger market, which was previously difficult due to
geographical and logistical constraints. The government's initiatives to support MSME exports are expected to further
solidify India's position as a global e-commerce player (Commrz) (Payoneer).
• Growth of Online Marketplaces: Major e-commerce players like Flipkart, Amazon, and Meesho have significantly expanded their operations in
India, driving substantial growth in the sector. Flipkart, for instance, leads in the apparel segment and has developed various initiatives to support local
entrepreneurs and MSMEs. Amazon, with its extensive market share, continues to be a dominant player despite regulatory challenges (Indian
Retailer).
• Employment and Entrepreneurship: The e-commerce sector is also a significant source of employment in India. It offers numerous opportunities for
entrepreneurs, especially through platforms like Meesho, which empowers individuals in tier-2 and tier-3 cities to start their own online businesses
with minimal investment. This democratization of commerce is creating a new wave of digital entrepreneurs and boosting local economies (Indian
Retailer) (Payoneer).
• Consumer Behavior and Trends: The pandemic accelerated the adoption of online shopping, making e-commerce an integral part of Indian
consumers' lives. Trends such as quick commerce, driven by the need for rapid delivery, and the growing demand for diverse product categories are
shaping the future of e-commerce in India. The online grocery market, for example, is expected to reach $26.93 billion by 2027 (India Brand Equity
Foundation).
• Cross-Border Trade: Indian businesses are increasingly engaging in cross-border e-commerce, exporting products globally. The United States remains
a key market, with Indian sellers leveraging platforms like Amazon and eBay to reach international customers. The 'Make in India' initiative,
emphasizing quality and innovation, is helping Indian products gain a competitive edge in global markets (Payoneer).
• Technological Integration: Technological advancements are enhancing the capabilities of e-commerce platforms. AI and machine learning are being
used to personalize shopping experiences, optimize supply chains, and improve customer service. The adoption of digital payment systems, supported
by government initiatives like UPI, is streamlining transactions and boosting consumer confidence in online shopping (Indian Retailer) (Payoneer).
• Environmental and Social Impact: E-commerce is also influencing environmental and social dynamics. The rise of digital commerce reduces the
need for physical stores, leading to changes in urban planning and retail infrastructure. There is a growing emphasis on sustainability, with many e-
commerce companies adopting eco-friendly practices and promoting sustainable products to meet the increasing demand for green alternatives (India
Brand Equity Foundation).
• Regulatory Environment: The regulatory landscape for e-commerce in India is evolving, with the government introducing measures to protect
consumers and ensure fair competition. Policies addressing data privacy, cybersecurity, and consumer rights are critical in building a trustworthy and
robust e-commerce environment. (Commrz) (Indian Retailer).