E-COMMERCE

Electronic commerce, commonly

known as
E-commerce or e Commerce
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Definition of Commerce
The exchange of goods and services for money
Consists of:
Buyers - these are people with money who want
to purchase a good or service.
Sellers - these are the people who offer goods
and services to buyers.
Producers - these are the people who create the
products and services that sellers offer to buyers.

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Elements of Commerce
You need a Product or service to sell
You need a Place from which to sell the products
You need to figure out a way to get people to
come to your place.
You need a way to accept orders.
You also need a way to accept money.
You need a way to deliver the product or service,
often known as fulfillment.
Sometimes customers do not like what they buy,
so you need a way to accept returns.
You need a customer service and technical
support department to assist customers with
products.
E-commerce can be specified as any form of economic activity
conducted through computer-mediated networks.

E-commerce is a new and exciting technology, attracting much
interest.

It has the power of fundamentally changing the ways in which
companies do business.

It is having a profound effect on the management of the supply
chain.

However, business-to-business (B2B) ecommerce is growing much
more quickly than B2C forms of electronic trading.
E-COMMERCE
6
History of E-commerce
EC applications first
developed in the early
1970s
- Electronic funds
transfer (EFT)
Limited to:
- Large corporations
- Financial institutions
- A few other daring
businesses

Architecture of Web-based E-Commerce System
Backend system
Firewall

Internet
Server side
Intranet
(Secure)
Web Server Application Server
Database
Service system
Client side
Different types of E-Commerce

Business
(organization)


Customer
(individual)



Business
(organization)



Customer
(individual)



B2C
(e.g Amazon)



C2B
(e.g Priceline)



C2C
(e.g eBay)



B2B
(e.g TPN)
The major different types of e-commerce are:
business-to-business (B2B) - is defined as e-commerce
between companies.

business to-consumer (B2C) is commerce between
companies and consumers, involves customers gathering
information; purchasing physical goods

business-to-government (B2G)

consumer-to-consumer (C2C) - is simply commerce
between private individuals or consumers.

Mobile commerce (m-commerce).
CATEGORIES OF ECOMMERCE
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Setting up for E-Marketing
Corporate websites
Build goodwill and
relationships; generate
excitement
Marketing websites
Engage consumers
and attempt to influence
purchase
Website design
7 Cs of effective website
design

Options
Creating websites
Placing online ads and
promotions
Creating or using Web
communities
Using E-mail
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Online forms of ads and
promotions
Banner ads/tickers
Skyscrapers
Interstitials
Content sponsorships
Microsites
Viral marketing
Future of online ads

Creating websites
Placing online ads and
promotions
Creating or using Web
communities
Using E-mail
Setting up for E-Marketing
Options
16
Web communities allow
members with special
interests to exchange views
Social communities
Work-related
communities
Marketers find well-defined
demographics and shared
interests useful when
marketing

Creating websites
Placing online ads and
promotions
Creating or using Web
communities
Using E-mail
Setting up for E-Marketing
Options
17
E-mail marketing
Key tool for B2B and
B2C marketing
Clutter is a problem
Enriched forms of
e-mail attempt to break
through clutter
Spam is a problem

Creating websites
Placing online ads and
promotions
Creating or using Web
communities
Using E-mail
Setting up for E-Marketing
Options
1. Production processes: which include planning of raw
materials, ordering, procurement and replenishment of
stocks from time to time; processing of payments;
links with suppliers through e-media; and production
control processes.
Three primary processes are enhanced in e-
business
2. Customerfocused processes: which include
promotional and marketing efforts, selling over the
Internet, processing of customers purchase orders
and payments, and customer support, among
others, providing after sales support.
Three primary processes are enhanced in e-
business
3. Internal management processes: which include
employee services, training, internal information-sharing,
video-conferencing, and recruiting. Electronic applications
enhance information flow between production and sales
forces to improve sales force productivity.
Three primary processes are enhanced in e-
business
E-Commerce in apparel industry

Exemplary concept in the future of textile and
apparel industry.
Major role in the present scenario of textile and
apparel industry.
Information and communication technologies
(ICTs).
Support electronic trading.
Extravagant amounts of information available to
users
Facilitate rapid communication


Draping models used on the Internet
Incorporated in internet websites for virtual
shopping.
Create their own model by submitting their body
measurements and appearance details.
Users can also rotate the model to view the outfit
from different sides.

E-business in apparel retail industry

Apparel industry has traditionally been slow to adopt
new business practices.
Become the third-largest retail sales category on the
Internet.
Forrester Research - online sales of apparel to reach
$20.2 billion in 2003.
New technologies, such as 3-dimensional browsing
and virtual fitting rooms.
Seeing the physical product and making the purchase
decision easier for the consumers.

Traditionally - apparel retail industry was defined -
purchased brand labels from manufacturers and then
sold those brand labels to consumers.
Rapid globalization - apparel retail industry who are
creating brands.
Creation of the World Wide Web is another factor -
increased the globalization of the retail industry.
Major retailers such as Wal-Mart, Nordstrom, JC
Penney (USA) and Marks and Spencers (UK)

Scope of E-commerce in apparel sector

Improve the efficiency and effectiveness of
marketing.
Provide customers access to information about
products and their availability.
Build brand value.
Offer customers a convenient medium to make
purchases online.
Competitive pricing.
One-source shopping.
Convenience and time-savings.
Increasing brand loyalty among consumers.

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Benefits of E-commerce
To consumers: 24/7 access, more choices, price
comparisons, improved delivery, competition
To organizations: International marketplace
(global reach), cost savings, customization,
reduced inventories, digitization of
products/services
To society: flexible working practices, connects
people, delivery of public services
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Benefits to Consumers
Convenience
Buying is easy and private
Provides greater product access and selection
Provides access to comparative information
Buying is interactive and immediate
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Benefits to Organizations
Powerful tool for building customer relationships
Can reduce costs
Can increase speed and efficiency
Offers greater flexibility in offers and programs
Is a truly global medium
30
Benefits to Society
More individuals can work from home
Benefits less affluent people
Third world countries gain access
Facilitates delivery of public services
31
Key Drivers of E-commerce
Technological degree of advancement of
telecommunications infrastructure
Political role of government, creating
legislation, funding and support
Social IT skills, education and training of
users
Economic general wealth and commercial
health of the nation
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Key Drivers of E-business
Organizational culture- attitudes to R&D,
willingness to innovate and use technology
Commercial benefits- impact on financial
performance of the firm
Skilled/committed workforce- willing and able to
implement and use new technology
Requirements of customers/suppliers- in terms of
product and service
Competition- stay ahead of or keep up with
competitors
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Appeal of E-commerce
Lower transaction costs - if an e-commerce site is
implemented well, the web can significantly lower
both order-taking costs up front and customer
service costs
Larger purchases per transaction - Amazon offers
a feature that no normal store offers
Integration into the business cycle
People can shop in different ways. The ability to
build an order over several days
The ability to configure products and see actual prices
The ability to easily build complicated custom orders
The ability to compare prices between multiple
vendors easily
The ability to search large catalogs easily
Larger catalogs
Improved customer interactions - company.

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Limitations of E-commerce
To organizations: lack of security, reliability,
standards, changing technology, pressure to
innovate, competition, old vs. new technology
To consumers: equipment costs, access costs,
knowledge, lack of privacy for personal data,
relationship replacement
To society: less human interaction, social
division, reliance on technology, wasted
resources, JIT manufacturing
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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