WELCOME

TO
THE WORLD OF


ELECTRONIC COMMERCE
Various Perspectives of Business

Consumers focus will be primarily on convenience,
access to the global market, savings and bargains.

Small business focus will be on competition in
industry, global reach and customer relations.

Large Business consideration will be for lean and
efficient operations, integration of supply chain for
cost management & operational efficiency.

Business Model
SUPPLIER
REGULATORY AUTHORITY
COMPANY
CHANNEL PARTNERS
CUSTOMER
EMPLOYEES
SERVICE PROVIDER
WHAT IS ELECTRONIC COMMERCE?
Definition
The process of Buying and Selling or Exchanging of products,
services and information via computer network.
In its broadest sense, electronic commerce encompasses any
commercial activity that takes place directly between a
business, its partners, or its customers through a combination
of computing and communications technologies.



5
EC Definitions & Concepts
Electronic Commerce (EC) is the process of buying,
selling, or exchanging products, services, and
information via computer networks
EC defined from these perspectives
Communications
Business process
Service
Online
Collaborations
Community
6
Exhibit 1.1
The Dimensions of Electronic Commerce
7
The EC Framework and Field
An EC Framework
EC applications supported by infrastructure and
5 support areas
People
Public policy
Technical standards and protocols
Business partners
Support services
8
Exhibit 1.2
A Framework for EC
1. Buyer logs on
the marketplace
2. Buyer searches
for products
3. Buyer selects
product
4. Buyer orders the
product
5. Purchase order
sent to seller
6. Seller confirms
the order
7. Buyer pays for the
product (Payment
options)
8. Payment information
sent to bank
9. Credit checked
Buyers
Bank
10. Credit
approved
Sellers Bank
11. Product
shipped
Customer
Certification
Authority
Places the Order
BACK OFFICE
PROCESSING
Processing
Unit
Channel
partners
Service
Provider
Supplier
Authenticates

Authenticates

Bank
11
Brief History of EC
EC applications first
developed in the early
1970s
Electronic funds transfer
(EFT)
Limited to:
Large corporations
Financial institutions
A few other daring
businesses

12
Brief History of EC (cont.)
Electronic data
interchange (EDI)
electronic transfer of
documents:
Purchase orders
Invoices
E-payments between
firms doing business

Enlarged pool of
participants to include:
Manufacturers
Retailers
Service providers

13
Brief History of EC (cont.)
Interorganizational systems (IOS)
Stock trading
Travel reservation systems
Internet became more commercialized in
the early 1990s
Almost all medium-and large-sized
organization in the world now has a Web site
Most large corporations have comprehensive
portals
Types of E-Commerce
Business to Business (B2B)
Business to Consumer (B2C)
Government to Business
Government to Citizen
15
Classification of EC by the
Nature of the Transaction
Business-to-business (B2B) : EC model in which all
of the participants are businesses or other
organizations
Business-to-consumer (B2C): EC model in which
businesses sell to individual shoppers
Business-to-business-to-consumer (B2B2C): EC
model in which a business provides some product or
service to a client business; the client business
maintains its own customers, to whom the product or
service is provided
16
Classification of EC by the
Nature of the Transaction
(cont.)
Consumer-to-business(C2B): individuals
who use the Internet to sell products or
services to organizations and /or seek sellers
to bid on products or services they need
Consumer-to-consumer (C2C) :
consumers sell directly to other consumers
17
Classification of EC by the
Nature of the Transaction
(cont.)
Mobile commerce (m-commerce)EC
transactions and activities conducted in a
wireless environment
Location-commerce(l-commerce)
m-commerce transactions targeted to
individuals in specific locations, at specific
times
18
Classification of EC by the
Nature of the Transaction
(cont.)
Intrabusiness (organizational) EC: EC
category that includes all internal
organizational activities that involve the
exchange of goods, services, or information
among various units and individuals in an
organization
19
Classification of EC by the
Nature of the Transaction
(cont.)
Business-to-employee (B2E): EC model in which an
organization delivers services, information, or products
to its individual employees
Collaborative commerce (c-commerce): EC model in
which individual or groups communicate or collaborate
online
E-government: Government-to-citizens (G2C):
EC model in which a government entity buys or
provides good, services, or information to
businesses or individual citizens
20
Classification of EC by the
Nature of the Transaction
(cont.)
Exchange (electronic): a public e-market
with many buyers and sellers
Exchange-to-exchange (E2E): EC model
in which electronic exchanges formally
connect to one another for the purpose of
exchanging information
Customer Research;
Pre-Sales Enquiries;
Information Publishing and
Dissemination;
Sales;
Advertising & Promotions;
Brand Management &
Awareness
Purchasing;


Transactions;
Funds Transfer;
Inventory Management
Delivery;
After-Sales Service;
Ongoing Relationship
Management; and
Customer Support.

Where Are Business Applying E-
commerce Solutions?
22
Marketing
Computer sciences
Consumer behavior and
psychology
Finance
Economics

Management information
systems
Accounting and auditing
Management
Business law and ethics
Others
Interdisciplinary Nature of EC
23
Success Story of
Campusfood.com
Campusfood.coms using power of ICT provided
interactive menus to students and achieved success.
Build customer base through Registering other Universities,
attracting students, Generating a list of restaurants from
which students could order food for delivery and some
activities were outsourced to a marketing firm enabling the
addition of dozens of schools nationwide
Revenue is generated through transaction fees5 percent
commission on each order



24
Campusfood.com (cont.)
At campusfood.com you can:
Navigate through a list of local restaurants,
Browse an interactive menu.
Bypass busy telephone signals to place an
order online
Get access to special foods, promotions, and
restaurant giveaways
Arrange electronic payment of your order
E-Commerce in India
World business transactions on net: $3000 billion (Forrester research)
Internet Usage in India: Around 13 crore 70 lakhs (11.4%) (5.7%
world) on June 30, 2012
E-business transactions in India: online retail industry to touch Rs
7,000 crore by 2015 (rising from the current Rs 2000 crore), with an
annual growth rate of 35 per cent. (ASSOCHAM)
Net usage growth rate: 130% (highest in the world)
Advertising on the Net: Around 430 crores
Computer penetration in India: 1 per 1000
Major Internet Business in Books, Apparels, Flowers, Gifts, Cinema
Tickets, cassettes and CDs.
Typical E-Business Customer: Age 25-34 yrs, Graduate, MFI Rs. 10-
15000
Pioneers in E-Business in India: CHARAGHDIN (planets largest shirt
store and 62% of the total business is on the net) and NAVNEET
Publications (books, music and stationary)
Worlds largest book store: Amazon.com (100% business on net)


E-Business by Category
Travel
28%
PC Hardware
16%
Grocery
9%
Toys
1% Videos
1%
Music
4%
Ticketing
4%
Speciality gifts
3%
Apparel
7%
Books
9%
Software
6%
Consumer
Electronics
2%
Health & Beauty
3%
Other
7%
Total Transactions: 3000 millions
BENEFITS OF E-COMMERCE
Shop is open for business 24hrs a day, 365 days a year
Access to a huge potential market
Increase in sales with little or no extra administration
Give a competitive edge over the rivals
Gain new customers and convince existing one to return
Access your customers in the comfort of their own
home
Allows reduced inventories and overhead by facilitating
pull type supply chain management.
28
The Benefits of EC
Benefits to Organizations
Expands the marketplace to national and
international markets
Decreases the cost of creating, processing,
distributing, storing and retrieving paper-based
information
Allows reduced inventories and overhead by
facilitating pull-type supply chain management
29
Benefits of EC (cont.)
Benefits to consumers
Enables consumers to shop or do other
transactions 24 hours a day, all year round from
almost any location
Provides consumers with more choices
Provides consumers with less expensive
products and services by allowing them to shop
in many places and conduct quick comparisons
30
Benefits of EC (cont.)
Allows quick delivery of products and services (in
some cases) especially with digitized products
Consumers can receive relevant and detailed
information in seconds, rather than in days or weeks
Makes it possible to participate in virtual auctions
Allows consumers to interact with other consumers
in electronic communities and exchange ideas as well
as compare experiences
Facilitates competition, which results in substantial
discounts
31
Benefits of EC (cont.)
Benefits to society
Enables more individuals to work at home, and to do
less traveling for shopping, resulting in less traffic on
the roads, and lower air pollution
Allows some merchandise to be sold at lower prices,
benefiting less affluent people
Enables people in Third World countries and rural
areas to enjoy products and services which otherwise
are not available to them
Facilitates delivery of public services at a reduced
cost, increases effectiveness, and/or improves quality
32
Interorganization and
Collaboration
Orbis Corporation changes linear physical
supply chain to an electronic hub
33
Orbis Corporation (cont.)
34
Typical Business Models in
EC
Online, direct marketing
Electronic tendering systems
Reverse auction is a tendering system sellers are
invited to bid on the fulfillment of an order to
produce a product or provide a service; the lowest
bid wins
Name your own price
Find the best price
35
Typical Business Models in EC
(cont.)
Affiliate marketing is an arrangement
whereby a marketing partner (business,
organization or individual) refers consumers
to the selling companys Web site
Viral marketing is word-or-mouth
marketing in which customers promote a
product or service to friends or other people
by using the Internet
36
The Digital Revolution and
the Economic Impact of EC
In the Digital Revolution the economy is
based on digital technologies including:
Digital communication networks
Computers
Software
Other related information technologies
Also called:
Internet economy
New economy
Web economy
37
The Digital Revolution and
the Economic Impact of EC
(cont.)
Digital networking and communication
infrastructures provide a global platform
where people and organizations:
Interact
Communicate
Collaborate
Search for information
38
Exhibit 1.5
Cost Curve of Regular & Digital
Products
39
Exhibit 1.6
The Economic Effects of EC
40

Networked Organizations
Myths About E-commerce
Myth #1: It is cheap, Easy and Lucrative
Myth #2: Everyones Doing It
Myth #3: Middlemen are Eliminated
Myth #4: All products become Commodities
and the Playing Field is Leveled
Myth #5: Brand Building is Easy on the Web


E-commerce Obstacles
Cost
Technology Issues
Privacy & Confidentiality
Security
Management of Change
Multi Cultural implications
Copyright
Threat to Human Relations





43
The Limitations of EC
Technical limitations
There is a lack of universally accepted standards for
quality, security, and reliability
The telecommunications bandwidth is insufficient
Software development tools are still evolving
There are difficulties in integrating the Internet and EC
software with some existing (especially legacy)
applications and databases.
Special Web servers in addition to the network
servers are needed (added cost).
Internet accessibility is still expensive and/or
inconvenient
References
1. Efraim Turban, Jae Lee, David King, H. Michel Chung; Electronic Commerce- A
Managerial Perspective, Pearson Education Asia, 2001
2. David Kosiur; Understanding Electronic Commerce, Prentice Hall, India, 2001
3. Charles Trepper; E-Commerce Strategies, Prentice Hall, India, 2001.
4. Agarwala N. Kamlesh, Lal Amit, Deeksha Agarwal; Business On The Net, Macmillan,
2000.
5. Adam, N. and Yesha, Y., Electronic Commerce: Current Research Issues and
Applications, Springer, New York, 1996.
6. Callon, J.D., Competitive Advantage Through Information Technology, Mc-Graw Hill,
New York, 1996.
7. Gates, William H, III. Business @ The Speed of Thought, New York, Warner Books, 1999.
8. Kalakota, R., and Whinston, A. B., Electronic Commerec: A Managers guide, Addison-
Wesley Publishing, New York, 1997.
9. Winkler, Agnieszka, Warp-Speed Branding: The Impact of technology on Marketing, John
Wiley & Sons, New York, 1995.
10. World Trade Organization, Electronic Commerce and the Role of the WTO, WTO
Secretariat, March 1998.
11. www.sympatico.ca.
12. www.ibc.com
13. Web site of United Parcel Service of America, Inc.

Thank You!