Chapter 1

Introduction to E-business
 Origin of Ecommerce
• E-commerce originated in a standard for the exchange of business
documents, such as orders or invoices, between suppliers and their
business customers.
• In 1960s, US Defence Department developed a secure and robust
communication network(ARPANET) which was able to designed
functioning even if part of it was damaged.
• In 1989 Tim Berners Lee proposed the World Wide Web.
• A couple of commercial sales websites were founded in early 1990s.
• Today’s E-commerce is actually got into existence with the 2 big
giants Amazon and Ebay in 1995.These websites completely
revolutionized the ecommerce industry and connected buyers and
sellers worldwide.

Advanced Research Projects Agency Network (ARPANET) was

the first public packet-switched computer network.
 E-commerce
• E-commerce (electronic commerce) is the buying and
selling of goods and services, or the transmitting of funds
or data, over an electronic network, primarily the internet.
• It is the trading in product or services using computer
networks, such as the internet.
• “Any transaction completed over a computer-mediated
network that involves the transfer of ownership or rights to
use goods and services.”
• These business transactions occur either as business-to-
business (B2B), business-to-consumer (B2C), consumer-to-
consumer or consumer-to-business.
 E-Commerce
• E-Commerce refers to the performing online commercial activities, transactions over
internet. It includes activities like buying and selling product, making monetary
transactions etc over internet. Internet is used for E-commerce. Websites and
applications (apps) are required for e-commerce. it is mainly connected with the end
process of flow means connected with the end customer.
• Examples of E-Commerce are online retailers like amazon, flipkart, Myntra, paytm
mall, seller of digital goods like ebooks, online service etc.

• Activities of E-Commerce are :

• Buying and selling product online
• Online ticketing
• Online Payment
• Paying different taxes
• Online accounting software
• Online customer support
Scope of Electronic Commerce
Traditional commerce vs E commerce
 E-Business
• E-Business : E-Business refers to performing all type of business activities
through internet. It includes activities like procurement of raw materials/goods,
customer education, supply activities buying and selling product, making
monetary transactions etc over internet. Internet, intranet, extranet are used in
e-business. Websites, apps, ERP, CRM etc are required for e-business.
• Examples of E-Business are e-commerce companies and its various internal
business activities, auction site, classified site, software and hardware developer
site etc.
• Activities of E-Business are :
• Online store setup
• Customer education
• Buying and selling product
• Monetary business transaction
• Supply Chain Management
• E-mail marketing
 Advantage and Disadvantage of
E-Business
• Advantages
1. Flexible Business Hours / 24/7 Availability
E-Business breaks down the time barriers that location based businesses encounter. The Internet is available 24
hours a day hence the business never closes.
2. Eliminates Geographic Boundaries / Global Reach
We can reach a worldwide audience for our product or service through the internet. There are no physical
restrictions on a specific geographical region. You track visitors using tools like Google Analytics, etc.
3. Reduces Transaction Cost
Running an online business reduces the cost per transaction because it take less manpower to complete an
online transaction.
4. Quick Updates / Easy Marketing
Whether it is your website, blog, or social network channels, you have access to make quick updates and order
processing on things like promos, holiday specials, shipping costs, etc. Email marketing is another excellent
channel for sending quick updates to your audience worldwide.
5. Saving Time and Cost
Operating an e-business saves time and cost since your customers can quickly reach you and make their
purchases online, and you can dispatch the items to their desired location.
6. Better marketing
As internet marketing becomes more and more prevalent, companies have been able to gain a lot of benefits.
One of these benefits is the ability to get their marketing for cheaper.
 Disadvantage
1. Security concerns and privacy violations – The biggest disadvantage of
e-business is the security issues it creates. For example, cyber crime is a
growing issue that businesses are more sensitive about every day.
2. Delivery or product/service is not fast – e-Businesses can be very
passive, which means that customers who want to see a product or
receive service are on hold for long periods of time.
3. Not accessible to all Resources such as Internet access, computer
hardware and software, broadband internet service providers, and even
smartphones can be expensive for some people who might not be able
to take advantage of the benefits that e-businesses offer.
4. Momentary Intangibility / No personal Touch An e-business normally
offers the customer no physical proximity to the items purchased until
delivery. Experiencing the feel, taste or smell of a product can influence
the decision to buy.
 Difference between E-commerce and E-
Business
E-Commerces E-Business
E-Commerce refers to the performing online E-Business refers to performing all type of
commercial activities, transactions over business activities through internet.
internet.

E-Commerce is a narrow concept and it is E-Business is a broad concept and it is

considered as a subset of E-Business. considered as a superset of E-Commerce.
Commercial transactions are carried out in e- Business transactions are carried out in e-
commerce. business.
In e-commerce transactions are limited. In e-business transactions are not limited.
It includes activities like buying and selling It includes activities like procurement of raw
product, making monetary transactions etc materials/goods, customer education, supply
over internet. activities buying and selling product, making
monetary transactions etc over internet.

It involves mandatory use of internet. It involves the use of internet, intranet or

extranet.
E-commerce is more appropriate in Business E-business is more appropriate in Business to
 Application of E-business
1. Retail and Wholesale
– E-retailing or online retailing refers to the transaction of goods and services
through online stores from businesses to consumers. It is achieved through
means such as virtual shopping carts and e-catalogs. The applications of e-
commerce in this sector is numerous.
2. Finance
– Finance and e-commerce is more connected today than ever. Banks and stock
markets use e-commerce significantly in their operation. Online banking
provides provisions such as balance check, bill payment, money transfer, etc.
3. Manufacturing
– In manufacturing, e-commerce forms a medium for companies to execute the
electronic exchange. Combined buying and selling, sharing market status,
inventory check information, etc. enables groups of companies to fluidly carry
out their operations.
 Application of E-business
4. Auctioning
– Applying e-commerce to auctions takes it to a more significant level where
people can participate without any geographical boundaries. That leads to
more participation, more negotiation, and helps to make auctions successful.
5. Marketing
– Marketing activities such as pricing, product features, and building customer
relationships can be strengthened using e-commerce to provide users an
enhanced and customized shopping experience. Digital marketing
strategies have become a significant way to promote businesses.
6. Online Shopping
– The shopping preferences of people have undergone a massive change in the
last few years. “Go online” has become a mantra for all businesses to succeed.
Online shopping is comfortable, convenient, and at most times, cost effective.
The prosperity of online shopping apps such as Flipkart, Amazon are proof of
this.
 Application of E-business
7. Mobile and Web Applications
– Popularly called mobile commerce or m-commerce applications, this is a
subset of retail e-commerce. Mobile or web application
development has become a staple for brands to showcase their business
capabilities. The consumer carries out purchases through mobile or web
applications that are optimized for the retailer. These applications also
ensure payment security through safe e-payment methods.
8. Online Booking
– Travel and tourism is a thriving industry today, and online booking is an
ecommerce application that is growing as a result of it. Online booking
helps people book travel essential services like train/flight tickets, hotel
rooms, tourism packages, transportation services, etc. It makes travel
very convenient and easy for people as everything can be set from the
tip of the fingers.
 Application of E-business
9. Online Publishing
– Digital magazines and e-books are slowly replacing
traditional printed books. It has several advantages such as
portability, lightweight, accessible from everywhere, etc.
They are also environment friendly as they help in reducing
paper and saving trees.
10. E-banking
– E-banking or internet banking is an e-commerce application
that has simplified time-consuming and complex banking
processes for people. It enables bank users to perform
transactions easily online without having to wait in long
queues in banks.