E-commerce and E-bidding

Dr. Kishor Adhikari

Associate Professor, School of Public Health and
Community Medicine
Meaning of Commerce
 Commerce is a division of trade or
production which deals with the exchange
of goods and services from producer to
final consumer.
 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.
Contd.
Producers - these are the people who create the
products and services that sellers offer to buyers.

Note: Sellers are generally recognized in two

different forms: retailers who sell directly to
consumers and wholesalers or distributors who sell
to retailers
 Internet addressing system
 Internet uses TCP/IP (Transmission Control
Protocol/Internet Protocol), therefore every
computer on the Internet has an IP address
 IP address is numerical, separated by dots
 Works with Domain Name System (DNS):
- com: for commercial purposes
- net: for Internet Service Providers
- org: for non-profit, non-commercial groups
- gov: reserved for government
- mil: reserved for military
- int: reserved for international organizations
E-COMMERCE
 It is commonly known as electronic marketing.

 It consist of buying and selling goods and

services over an electronic system such as the
internet.

 E-commerce is the purchasing , selling &

exchanging goods and services over computer
network or internet through which transactions
or terms of sale are performed electronically.
 E-commerce involves the technology such as mobile
commerce, electronic fund transfer, supply chain
management, internet marketing, online transaction
processing (OTP), electronic data interchange (EDI).
 E-commerce application first developed in 1970s.
 “e-commerce is the production, distribution,

marketing, sale or delivery of goods and services by

electronic means i.e. conducting business over
internet.”
The World Trade Organization (WTO)
 E-commerce (electronic commerce or EC) is the
buying and selling of goods and services, or the
transmitting of funds or data, over an electronic
network, primarily the internet.
 These business transactions occur either as

business-to-business, business-to-consumer,
consumer-to-consumer or consumer-to-
business.
 The terms e-commerce and e-business are often

used interchangeably. The term e-tail is also

sometimes used in reference to transactional
processes for online shopping.
7
Process of E-commerce

1
The process of E-commerce
The process of E-commerce
 A consumer uses Web browser to connect to
the home page of a merchant's Web site on the
Internet.
 The consumer browses the catalog of products

featured on the site and selects items to

purchase. The selected items are placed in the
electronic equivalent of a shopping cart.
 When the consumer is ready to complete the

purchase of selected items, she provides a bill-

to and ship-to address for purchase and
delivery
The process of E-commerce

 When the credit card number is validated and

the order is completed at the Commerce
Server site, the merchant's site displays a
receipt confirming the customer's purchase.

 The Commerce Server site then forwards the

order to a Processing Network for payment
processing and fulfilment.
 E-cash payment procedure
1. Consumer buy cash from bank.
Merchant 2. Bank sends E-cash bits to
consumer.
3. Consumer send E-cash to
5 merchant.
4 4. Merchant checks with banks
that E-cash is valid.
Ban 3 5. Bank verifies that E-cash is
k
valid.
2 6. Parties complete transformation
1 e.g merchant present e-cash to
issuing back for deposite once
Consum goods or service are delivered.
er
15 05/10/2020
 Smart card payment procedure
(Mondex smart card)

Bank 1. User opens the account

2 and receive smart card.
1 2. User download currency
onto the card.
6 3. User inserts card in
Consum reader.
er/user 3
4. Currency is transferred
Reader
from user card to vendor.
5 4
5. Goods delivered
Vender 6. Vendor redeems currency.
16 05/10/2020
 E-commerce Today
 The Internet is the perfect vehicle for e-
commerce because of its open standards and
structure.
 No other methodology or technology has

proven to work as well as the Internet for

distributing information and bringing people
together.
 It’s cheap and relatively easy to use it as a

medium for connecting customers, suppliers,

and employees of a firm.
 No other mechanism has been created that

allow organizations to reach out to anyone and

everyone like the Internet.
 E-commerce Today
 The Internet allows big businesses to act
like small ones and small businesses to
act big.
 Web-based solutions must be easier to

use and more convenient than traditional

methods if a company hopes to attract
and keep customers.
 Four Categories of E-Commerce
Business originating from...

Business Consumers

Business B2B C2B

And selling
to...

Consumers B2C C2C

19
 Distinct Categories of E-
Commerce
 Business to Business (B2B) refers to the full spectrum of e-
commerce that can occur between two organizations.
This includes purchasing and procurement, supplier
management, inventory management, channel management,
sales activities, payment management &service and support.
Examples: FreeMarkets, Dell and General Electric

 Business to Consumer (B2C) refers to exchanges between

business and consumers, activities tracked are consumer
search, frequently asked questions and service and support.
Examples: Amazon, flipcart

2
 Distinct Categories of E-Commerce
(cont’d)

 Peer to Peer (C2C) exchanges involve transactions

between and among consumers. These can include third
party involvement, as in the case of the auction website
Ebay.
Examples: Owners.com, Hamrobazar.com

 Consumer to Business (C2B) involves when

consumers band together to present themselves as a
buyer in group.
Example: www.planetfeedback.com

2
 E-commerce vs. E-business
 E-commerce is about doing business electronically
 E-commerce conducting financial transactions
electronically
 E-business is conducting business on the Internet
 E-business is the transformation of business
processes through the Internet
 E-business conducting business on the Net, not only
buying and selling but also servicing customers and
collaborating with business partners often used
interchangeably, e-business is everything to do with
the back end.

22
 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

 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

 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

 Benefits to Society

More individuals can work from home

Benefits less affluent people

Third world countries gain access

Facilitates delivery of public services

Introduction to e-Commerce contd...
 E-commerce disadvantages – classified into
two major categories
◦ Technical disadvantages
◦ Non-Technical disadvantages
Introduction to e-Commerce contd...
 Technical disadvantage
◦ lack of system security, reliability or standards
owing to poor implementation of e-Commerce
◦ Software development industry still evolving and
keeps changing rapidly
◦ In many countries, network bandwidth might cause
an issue as there is insufficient telecommunication
bandwidth available
Introduction to e-Commerce contd...
◦ Special types of web server or other software might
be required
◦ Maybe difficult to Integrate E-Commerce software
or website with the existing application or
databases
◦ There could be software/hardware compatibility
issues
Introduction to e-Commerce contd...

 Non-technical disadvantage
◦ Initial cost
◦ User resistance
◦ Security / Privacy
◦ Lack of touch or feel of products
◦ E-Commerce applications are still evolving and
changing rapidly
◦ Internet access not cheaper for many potential
customers living in remote villages
 Traditional vs. New Business Models
Traditional New Business

Production Mass Personalized

Manufactures push Customer Pull
Distribution Middleman Direct

Communications Closed Open

Finance Slow Fast
Difficult Easier
Markets Local Global
Mass Niche
Assets Physical Virtual
31
Facts files
Electronic payment procedures
 Electronic Payment Systems – payment
through electronic means or paperless
monetary transactions which reduces
◦ paper work
◦ Transaction cost
◦ Labor cost
◦ time
Electronic payment procedures
contd...
 Mode of electronic payment
◦ Credit Card
◦ Debit Card
◦ Smart Card
◦ E-Money
◦ Electronic Fund Transfer (EFT)
Electronic payment procedures
contd...

 Credit card – most common method of

electronic payment. E.g. visa or mastercard
 Actors involved in credit card payment

◦ The card holder - Customer

◦ The merchant - seller of product who can accept
credit card payments.
◦ The card issuer bank - card holder's bank
◦ The acquirer bank - the merchant's bank
Electronic payment procedures
contd...
 Credit card payment process
Electronic payment procedures
contd...
 Debit card
◦ Should have the bank account
◦ Unique number mapped to bank account
◦ Payment made is deducted from card holder’s bank
account immediately
◦ Should have sufficient amount in the bank account
Electronic payment procedures
contd...
 Smart card
◦ Similar to debit/credit cards in appearance
◦ embedded with microprocessor chip that stores
customer personal info/work related info
◦ Information stored in encrypted form so secure
◦ Used also to store money which is deducted as
per usage
◦ E.g. visa cash cards
Electronic payment procedures
contd...
 E-money – transaction where payment is
done over the network and amount gets
transferred from one financial body to
another
◦ Payment done via. debit, credit and smart cards
Electronic payment procedures
contd...
 Electronic Fund Transfer (EFT) – very popular
electronic payment method
◦ Transfer money from one bank account to another
bank account
◦ Fund transfer
Electronic payment procedures
contd...
 Security systems - paramount to electronic
transactions
 Essential requirements for safe e-

payment/e-transaction
◦ Confidentiality
◦ Integrity
◦ Availability
◦ Authenticity
Electronic payment procedures
contd...
◦ Non- Repudiabiity
◦ Encryption
◦ Auditability
Electronic payment procedures
contd...
 Measures to ensure security
◦ Encryption
◦ Digital Signature
◦ Security Certificates
E-commerce Trends

44
E-commerce sell are growing by
>19% a year
E-commerce trends
 Originally, electronic commerce was identified as the
facilitation of commercial transactions electronically
using technology such as Electronic Data Interchange
(EDI) and electronic funds transfer (EFT).
 These were introduced in late 1970s.
 The growth and acceptance of credit card, automate

teller machine (ATM) and telephone banking in 1980s

were also forms of e- commerce.

05/10/2020 48
Cont…
 In 1994 first internet shopping started.
 By end of 2000 many European and American

business companies offered their service through the

e-commerce.

05/10/2020 49
Cont…
 Now it is getting globalized, globalized products are
being offered with a localized E-commerce
experienced, through local language, payment
options and marketing.
 People does ticket booking like plane ticket, movies

ticket, holidays package etc. through online.

 They buy and sell the things online through internet.

For e.g, Amozon.com. Bigbazzar.com etc.

 Similarly there is a rise of mobile commerce now a

days, like mobile payment, holiday shopping etc.

05/10/2020 50
Trends of E-commerce in Nepal
 Many companies have started the trend of
eCommerce in Nepal decade ago, but the
challenges are still the same.
 The actual sales have not been able to start

due to lack of knowledge, awareness and

online payment systems.
 Payment Gateways are being developed but

they have their limitation due to legal and

security issues.
Contd.
 The lack of proper knowledge and awareness among
the generation is the major hurdle in e-Commerce.
 In past recent years due to education and reach to

internet among the many people in Nepal has

brightened the future of e-Commerce.
 The interest of students in the field of IT, the growth

of IT companies has helped a lot in the awareness

and interest in young generation for internet and IT,
has directly created more opportunities for the
growth of e-Commerce in Nepal.
53%

23%

8% 4%
E-bidding procedure in health
services management

 Bidding - is an competitive offer of a price

one is willing to pay for something (goods,
service) or a demand that something be done
E-bidding procedure in health
services management contd...

 General bidding process

◦ Specification
◦ Request for bids
◦ Bidding
◦ Reviewing the bids
◦ Awarding the contracts
E-bidding procedure in health
services management contd...

 Public Procurement Monitoring Office (PPMO)

established 2064 in accordance with
◦ Public procurement Act, 2063
◦ Public Procurement Regulation, 2064
 www.ppmo.gov.np
E-bidding procedure in health
services management contd...

 Ingovernment, three type of bidding

in practice
◦ Direct purchase
◦ Sealed quotation
◦ Tender
 National Competitive Bidding (NCB)
 International Competitive Bidding (ICB)
E-bidding procedure in health
services management contd...
 PPMO initiated e-bidding system for all
government organizations
 Three phases of e-bidding system envisaged

◦ E-submission
◦ E-bidding
◦ E-bidding enhancement with Nepali script
E-bidding procedure in health
services management contd...
 Developed e-submission system
◦ www.gepson.gov.np – used by 200+ government
organizations
◦ www.bolpatra.gov.np – used by 45 government
organizations
E-bidding procedure in health
services management contd...
 Electronic Bidding in health sector –
◦ Logistic Management Division (LMD) under Department
of Health started e-submission in 2068/069
◦ Locally developed
◦ Scanned form submission feature
 Why e-bidding in health?
◦ Need to purchase varieties of commodities
(equipments, drugs, vaccines) regularly
◦ Unhealthy competition
◦
E-bidding procedure in health
services management contd...
 E-submission – bidders submit bid
documents in scanned form on-line. It is
done electronically
◦ to increase transparency
◦ non-discrimination
◦ equality of access
◦ open competition.
E-bidding procedure in health
services management contd...
 E-submission procedure
◦ On-line registration of company details
◦ Review by LMD
◦ Notification of acceptance
◦ Creates username, password by the company
◦ If interested to bid, pays registration fee in Nepal
Rastra Bank and gets the voucher
◦ Scan the voucher and send to LMD
E-bidding procedure in health
services management contd...
 E-submission procedure contd...
◦ Encrypted voucher received by LMD
◦ Notification of voucher receipt to the company
◦ Company scans all necessary documents and sends
to LMD
◦ Before deadline, number of submissions appears.
After deadline ends, all companies’ name visible
E-bidding procedure in health
services management contd...
 E-submission procedure contd...
◦ In opening time, three level of password used to
open bid documents
 Officer, Procurement section
 Director, LMD
 Officer, IT section
◦ Regular bidding process begins
E-bidding Screenshots
E-bidding Screenshots contd...
E-bidding Screenshots contd...
E-bidding Screenshots contd...
E-bidding Screenshots contd...
E-bidding Screenshots contd...
Thank You !!!