Introduction to E-Commerce
E-Commerce stands for electronic commerce and
pertains the trading of goods and services with the help
of the electronic mediums. E-commerce has
revolutionized the business by creating it as a main
marketing place for consumers and business. Along with
the developments of internet and web –based
technologies the difference between the traditional
markets and electronic based markets are gradually
being narrowed down. Throughout the world all the
developed and developing countries are showing a
tremendous growth in the Ecommerce. The low cost of
the PC and growing use of internet are considered to be
the main reason for that.
Definition:
The sharing of business information,
maintaining the business relationships
and conducting the business
transactions using the computers and
their connection to the
telecommunication network such as
internet is called E-Commerce, or simply
we can say that E-Commerce is nothing
other than buying and selling the goods
over the internet through the help of
websites.
Meaning of Ecommerce:
Buying
Selling Computer
Products Ecommerce
Marketing Network
Servicing
Traditional commerce
The casual way of making any business
transaction is considered to be
traditional commerce. When internet
usage started playing a vital role in
commerce, it is considered to be the
best way of making business
transactions with ease and with low cost.
Even though traditional commerce is
said to be more trustworthy, Ecommerce
is easiest and cheapest means of
business.
E-commerce vs Traditional commerce
The difference between e-commerce and in-store sales
(traditional commerce) is that consumers often associate
online shopping with "deals" or "lower prices ", by different
sites and easy cross-referencing via different search engines.
By using the Internet to purchase goods or services consumer
competition increases because of greater accessibility. In other
words, while consumers can visit only a few traditional outlets
per day, they have access to countless Web retailers in the
same time. Because of the ease of access to many retailers and
greater opportunities for bargain-hunting, competition on the
web is fierce. Price transparency is the rule. With shopping-
comparison services, it is possible to check the price offered
by hundreds of merchants with a couple of mouse clicks.
Another difference between e-commerce and
traditional selling is consumer's immediate access
to information. Consumers have access to
unlimited amount of product information, not just
from manufacturer's websites but also from online
reviews written by previous customers, employees,
and organizations .Still a larger difference between
traditional commerce and e-commerce exists
because information technology (IT) is the
middleman, with IT acting as a facilitator for
globalization and integration.
Differences also exist in terms of costs to consumers and
retailers. For example, shipping is usually charged but not
sales taxes, depending on the state or whether a storefront
exists in the marketplace. In addition, face-to-face
interaction usually does not exist in online retailing.
Similarly, online retailers must rely on different skill sets to
effectively market to their target audiences. For example,
instead of facilitating taste tests to help sell a particular
product, online retailers would use Internet pop-ups or e-
mail blasts with promotional codes to feature a specific
item. The differences between e-commerce and traditional
in-store sales may still pose difficulties for some consumers,
but it is important to know that consumer perceptions are
steadily shifting in a positive way toward online retailing.
Terminologies and Fundamentals
Entering into the computer era, we are witnessing one of
the most important changes to our daily needs - the move to an
Internet based society. As a result, much has changed at home,
school, work and so on. One of the most significant changes is
how we conduct business. In that sense, appearance of e-
commerce, which in fact involves the process of buying, selling,
or exchanging products, services and information via computer
networks becomes one of the most investigated phenomena of
the last decade. It is analyzed in relation to many disciplines
such as law, politics, software engineering, sociology,
international relations, business, economics, security, linguistics
and so on.
As a consequence of digital revolution there are lot of
terms in the field of e-commerce such as brick and mortar(pure
physical organizations), EDI, and so on which should be
collected, considered and studied. E-commerce will not be
understandable properly if we are not familiar with e-commerce
terminologies and fundamentals.
The major terms and fundamentals that
related to Ecommerce are:
Online virtual
organizations
B2B2C2C
M-commerce
Intrabusiness
Non-business EC
E-government
Exchange2Exchange (many
buyers and sellers)
Payment cards(credit
cards)
Advantages of Ecommerce
Buying and selling a variety of goods from home
or business firms with virtual auctions.
We can make the transactions anywhere and in
anytime without any difficulties providing 24x7
facility.
We may make better look for lowest cost for
specific goods.
Business can reach throughout the world so that
we can establish more business partnerships.
The process of order cost gets minimized.
We can enter into the new markets in an
efficient way.
Disadvantages or limitations
Data interchange using EDI is considered
to be expensive for small business.
The security over the internet is not
good. Viruses and hackers may cause
more defects.
E-transaction is not a guaranteed one.
The rapid changes in the technology so
that updated knowledge of technological
terms is a must one.
Countries like ours, network bandwidth
may be the biggest issue for using.
Mobile Commerce
M-commerce (mobile commerce) is
the buying and selling of goods and services
through wireless technology-i.e. handheld
devices such as cellular phones and PDAs.
As content of delivery over
wireless devices becomes faster, more secure,
and scalable, some believe that m-commerce
will surpass wire line e-commerce as the
method of choice for digital commerce
transactions. This may be true for the where
there are more mobile phone users than there
are PC based Internet users.
Why M-Commerce?
Financial services, including mobile banking for
accessing the accounts and paying the bills and
trading can be conducted from the same
handheld device
Telecommunications, in which service changes,
bill payment and account reviews can all be
conducted from the same handheld device.
Service/retail, as consumers are given the
ability to place and pay for orders on-the-fly.
Information services, which include the
delivery of entertainment, financial news, sports
and all updates in a single mobile device.
Types of Ecommerce
There are mainly four types of business
models based on transaction party. They
are
B2C(Business to
Consumer)
B2B(Business to Business)
C2B(Consumer to
Business)
C2C(Consumer 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. Usually, B2C E-commerce
web shops have an open access for any visitor,
meaning that there is no need for a person to
login in order to make any product related inquiry.
A website following the B2C business
model sells its products directly to a customer. A
customer can view the products shown on the
website. The customer can choose a product and
order the same. The website will then send a
notification to the business organization via email
and the organization will dispatch the
product/goods to the customer.
B2C Architecture:
B2B:
In a Business-to-Business E-commerce
environment, companies sell their online goods
to other companies without being engaged in
sales to consumers. In most B2B E-commerce
environments entering the web shop will
require a log in. B2B web shop usually contains
customer-specific pricing, customer-specific
categories and customer-specific discounts. As
an example, a wholesaler places an order from
a company's website and after receiving the
consignment, sells the end-product to the final
customer who comes to buy the product at one
of its retail outlets.
B2B Architecture:
C2B:
In this model, a consumer approaches a website
showing multiple business organizations for a particular
service. The consumer places an estimate of amount
he/she wants to spend for a particular service. For
example, the comparison of interest rates of personal
loan/car loan provided by various banks via websites. A
business organization who fulfills the consumer's
requirement within the specified budget, approaches the
customer and provides its services.
C2B Architecture:
C2C:
A website following the C2C business model
helps consumers to sell their needs like residential
property, cars, motorcycles, etc., or rent a room
by publishing their information on the website.
Website may or may not charge the consumer for
its services. Another consumer may opt to buy the
product of the first customer by viewing the
post/advertisement on the website. A well-known
example is eBay.
C2C Architecture:
E-commerce framework
The framework of ecommerce includes the applications of
EC such as banking, shopping in online stores and malls,
buying stocks, finding a job, conducting an auction, and
collaborating electronically on research and development
projects. To execute these applications it is necessary to
have supporting information and organizational
infrastructure and system which includes
Common business service infrastructure( security smart
card/electronic payment)
Messaging and information distribution (EDI, HTTP,E-mail)
Multimedia and network publishing infrastructure(html,
www)
Network infrastructure(telecom, internet, WAN, LAN,
intranet, extranet)
People (Buyers, Sellers,ISP,Management)
Diagram for Architectural framework for electronic commerce is given below:
E-Commerce Applications
* Stock Jobs *Online Banking *
Procurement and Purchasing * Mails
* Online marketing and
advertisement*Auctions * Travels *
Customer Service * Online publishing
People Public Policy Technical standards Organization
Buyers, sellers, Taxes, legal and privacy for documents, security partners, competitors
Intermediate issues, free speech, and network protocols associations
services, domain names payment govt.services
IS,people and
Management
Infrastructure
1 2 3 4 5
Common business Managing and Media content Network Interfacing
Services Infrastructure Info. Distribution and network Infrastructure infrastructure
(security Infrastructure(EDI, publishing (Telecom,TV (To Dbases,
Authentication, E-mail, HTTP) infrastructure internet, customers &
payment) (html,java,www) intr&extranet) Applications)
EC Management
Ecommerce Framework:- Webshop
Web Shop Order Sample:
Benefits of E-commerce:
The major benefits are increasing sales and
decreasing cost. The other benefits are:
Increased accessibility to customers
Convenience of making comparisons
Increased profitability
Innovation
Improvement in consumer service
Better buyer decisions
Reduce delivery time labour cost and so
on
