Electronic Commerce: Unit V
Electronic Commerce: Unit V
Electronic Commerce: Unit V
UNIT V
E-Commerce
• ”Electronic Commerce” commonly known as E-commerce.
• It is any business transaction done via internet.
• It is the process of buying and selling for exchange of products, services and information via
computer networks such as internet.
• E commerce draws on technologies such as mobile commerce, electronic fund transfer, inventory
management system and automated data collection.
• Companies like FlipKart, Amazon, Yatra, Make my Trip, Book my Show, Snap Deal etc. have
made a mark in the e-commerce sector in India.
Features of E-Commerce
Ubiquity
Internet/web technology is available everywhere. Market place can be created so shopping can
happen anywhere.
Global Reach
Technology reaches across national boundaries which makes marketspace potentially billions.
Universal Standards
There is one set of technology standards namely internet standards. Standards that are set by all
nations around the world.
• Richness
It means that website can be made attractive for people to browse it. Video, audio and text
messages are possible.
• Interactivity
Technology that allows for two way communication between merchant and the consumer.
Categories Of E-Commerce
❑ Business to Consumer(B2C)
B2C stands for Business to Consumer as the name suggests, it is the model taking businesses and
consumers interaction.
Online business sells to individuals. The basic concept of this model is to sell the product online to the
consumers.
B2C is the indirect trade between the company and consumers. It provides direct selling through
online.
For example: if you want to sell goods and services to customer so that anybody ca n purchase any
products directly from supplier’s website.
❑ Consumer to Consumer(C2C)
C2C stands for Consumer to Consumer. It helps the online dealing of goods or services among people.
Though there is no major parties needed but the parties will not fulfil the transactions without the
program which is supplied by the online market dealer such as eBay.
❑ Business-to-Government(B2G)
B2G model is a variant of B2B model. Such websites are used by government to trade and exchange
information with various business organizations.
Such websites are accredited by the government and provide a medium to businesses to submit
application forms to the government.
❑ M-Commerce
M - Commerce is Mobile Commerce, it is a subset of e-commerce.
Buying & selling of goods with the help of handheld devices such as cellular phones,
PDA(Personal Digital Assistants),laptop.
It is essentially a way of carrying thousands and millions of retail shops in your pocket.
Nearly 70% of the online transactions that occur in India happen from mobile phones.
Some applications of M-commerce example can be: Mobile Banking, Mobile ticketing, Auctions
Advantages Of E-Commerce
Access to global market
It provides a global market place. Increased potential market share and global reach.
Time saving
It saves time, money and efforts.
Easy Comparison
Price and product comparisons are available online.
Wide range of options
Ecommerce provides more choices for products and services online.
Easy to find reviews
With every product and service online we get the ratings and the reviews for it.
Coupons & Deals
Customers enjoy the benefits they get online. There are many sales, coupons and deals available online.
Cash on Delivery
E-commerce provides with improved buying experience and the delivery processing. Consumer gets the product or the service at
the doorstep.
24x7
It enables 24x7 access to the online market place. We can access the e-commerce sites at anytime and from anywhere.
Limitations Of E-Commerce
➢ Initial cost of setup
There is a high start up cost. Some components required for ecommerce are the connection cost to
internet, hardware, software, maintenance, etc.
Lack of internet access
For an ecommerce site internet is the most important thing required. Limitation of internet is also a major
disadvantage as it still has not touched the lives of every individual.
Security & Privacy
The biggest drawback of e-commerce is the issue of security. Certain websites do not have capabilities to
conduct authentic transactions.
Absence of physical touch
People have to rely on electronic images to purchase products. Sometimes when it is delivered it may
not match the product ordered.
Perishable commodities
Ecommerce is not suitable for perishable goods and food items. Perishable products are those which
require proper storage.
Taxation
Incase of different geographical locations, sales taxes become an issue.
User resistance
People fear to operate in a paperless and faceless electronic world.
Value Chain & Strategy in E Commerce
E Business
• E Business is known as Electronic Business.
• E-Business is the conduct of business on the Internet.
• It has broader implications because it refers to not only buying and selling
but also servicing customers and collaborating with business partners.
• E-Business means connecting critical business systems directly to
customers, vendors and suppliers- via the Internet, Extranet and Intranets.
• One of IBM’s most important inventions wasn’t an invention at all. It was a
game changing insight, which company famously coined “E-BUSINESS” in
October 1997.
Strategy to launch an E-Business
➢ Choosing a product
1. Finding a product to sell
There are several things you need to consider when deciding what your product offering
will be. You will want to find something that has a large global demand, high margins and can
be easily warehoused and fulfilled.
2. Evaluating your idea
Evaluating an idea involves careful examination of the feasibility, the uniqueness, market
analytics, and costs involved in launching and maintaining the business.
➢ Setting up business
• Here setup business means to set up the website for business.
• To get your website up and running, you’ll need to purchase web hosting, which is
typically offered by the same companies that provide domain registration. Hosting
gives your website a place to live on the Internet.
➢ Understanding SEO (Search Engine Optimization)
• Before you jump into building store, you should understand the basics of search engine
optimization so that you can properly structure your site and pages for Google and other search
engines.
• Ranking in the first search results for targeted commercial search queries is the outcome of a
detailed Ecommerce SEO strategy.
Smart Card
o Smart card is again similar to a credit card or a debit card in appearance, but it has a small
microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or
personal information. Smart cards are also used to store money and the amount gets deducted after
every transaction.
o Smart cards can only be accessed using a PIN that every customer is assigned with. Smart cards are
secure, as they store information in encrypted format and are less expensive/provides faster
processing.
E-Money
o E-Money transactions refer to situation where payment is done over the network and the amount gets
transferred from one financial body to another financial body without any involvement of a middleman. E-
money transactions are faster, convenient, and saves a lot of time.
o Online payments done via credit cards, debit cards, or smart cards are examples of e money transactions.
Another popular example is e-cash. In case of e-cash, both customer and merchant have to sign up with the
bank or company issuing e-cash.