INTRODUCTION

In the emerging global economy, e-commerce and e-business have

increasingly become a necessary component of business strategy and a
strong catalyst for economic development. The integration of
information and communications technology (ICT) in business has
revolutionized relationships within organizations and those between
and among organizations and individuals. pecifically, the use of ICT
in business has enhanced productivity, encouraged greater customer
participation, and enabled mass customization, besides reducing costs.
!ith developments in the Internet and !eb-based technologies,
distinctions between traditional mar"ets and the global electronic
mar"etplace-such as business capital size, among others-are gradually
being narrowed down. The name of the game is strategic positioning,
the ability of a company to determine emerging opportunities and
utilize the necessary human capital s"ills (such as intellectual
resources) to ma"e the most of these opportunities through an e-
business strategy that is simple, wor"able and practicable within the
conte#t of a global information milieu and new economic environment.
!ith its effect of leveling the playing field, e-commerce coupled with
the appropriate strategy and policy approach enables small and medium
scale enterprises to compete with large and capital-rich businesses.
E-COMMERCE VS E-BUSINESS

E-COMMERCE
$-commerce involves digitally enabled commercial transactions
between and among organizations and individuals
Electronic-Commerce is a elling product online via the !eb. %lso
called &e-business,& &e-tailing& and &I-commerce.&
Explanation
%lthough in most cases e-commerce and e-business are synonymous, e-
commerce implies that goods can be purchased online, whereas e-
business might be used as an umbrella term for a total presence on the
!eb, which would include the e-commerce shopping component. $-
commerce may also refer to electronic data interchange ($'I), in which
one company(s computer )ueries the inventory and transmits purchase
orders to another company(s computer.
For Example:
In *++,, a telegraph operator was able to obtain a shipment of watches
that was refused by the local -eweler. .sing the telegraph, he sold all
the watches to fellow operators and railroad employees and then
ordered more. !ithin a short time, he made enough money to )uit his
-ob and start his own catalog mail order business. The young man(s
name was /ichard ears, who formed ears, /oebuc" and Co. in *+01.
E-BUSINESS
Electronic-2usiness is doing business online. The term is often used
synonymously with e-commerce, but e-business is more of an umbrella
term for having a presence on the !eb. %n e-business site may be very
comprehensive and offer more than -ust selling its products and
services.
For Example:
It may feature a general search facility or the ability to trac" shipments
or have threaded discussions. In such cases, e-commerce would refer to
the order processing component of the site.
Differences Beteen E-Commerce an! E-B"siness
$-Commerce and $-2usiness are two completely different terms but unfortunately they
are always used interchangeably by many of us. The reason behind this lies in the
meanings of &business& and &commerce& in $nglish language. 2ut there is a difference
between e-commerce and e-business. There are many people who understand the subtle
differences between the two and there had always been a debate among these two groups
about the differences and similarities between e-commerce and e-business. The aim of
writing this article is to clearly bring out the differences between the two as both of them
are completely different phenomenon.
T#e !ifferences $eteen t#e to are as follos:
$-Commerce is the subset of $-2usiness. If you remember the 3enn diagram you
studied in school then you can very well understand what I am trying to convey. The
later one is a very broad concept while the former one is -ust a small part of it. This
relationship will be cleared in the subse)uent points.
Those activities which essentially involve monetary transactions are termed as
&e-commerce&. 4owever, e-business is a much broader term. There are many other
things besides selling including but not limited to mar"eting, procurement of raw
materials or goods, customer education, loo"ing for suppliers etc.
To sell online is e-commerce but to bring and retain customers and educate them
online about the product or service is e-business. 4aving a website to do it is not
sufficient. 2ut, having a professionally built website loaded with latest technologies
to capture the attention of the visitor and win his5her appreciation is re)uired. !hen
money is involved then the first thing which user loo"s for is safety and security of
his5her money. 4aving a website laden with such )ualities is important.
!hen 'ell sell computers, laptops, monitors, printers, accessories etc online
then it is not engaged in e-commerce but e-business. 6et me tell you how. !hen a
visitor comes on the website, the first thing he see is website design and navigation as
well as those things which are going to help him find what he is loo"ing for and if he
directly lands on the page he was loo"ing for, he loo"s for the information related to
it. The information provided should be appealing and clear ma#imum doubts of the
visitor so as to convert him in a client. Till now no money has been e#changed nor
been tal"ed about. o, was this e-commerce7 8o, it is e-business which guides the
visitor.
$-commerce has also been defined as a process covering outward processes that
touch customers, suppliers and e#ternal partners while e-business covers internal
processes such as production, inventory management, product development, ris"
management, finance etc.
In all, e-commerce can be described as the use of the Internet and the web to transact
business. 9ore formally, digitally enabled commercial transactions between and among
organizations and individuals. :n the other hand, e-business can be described as the
digital enablement of transactions and process within a firm, involving information
systems under the control of the firm. 9oreover, e-business applications turn into e-
commerce precisely when an e#change of value occurs.
I simply love the web. %ccording to me, it(s the most happening place in the world and
the best place to interact and gain "nowledge. 9y strong attraction towards site analysis
from users as well as search engines perspective made me to pursue the career in Internet
9ar"eting. I started as $: but now I wor" as an Internet 9ar"eting pecialist.
BENEFITS OR %DV%NT%&EES OF E-
COMMERCE
2y ma"ing a few mouse clic"s, entrepreneurs can successfully
complete an online commercial transaction. 4aving an e-commerce
solution today has become a necessity.
9oving a business to the Internet is a sound strategy for increasing
business volume, ma"ing a business instantly international and opening
up possibilities that can never e#ist in the ;real world<.
It doesn=t matter even if businesses are small and localized. >oing
international will facilitate better support since e-commerce solutions
will ma"e it a ?@AB business.
% business with a strong Internet presence can reduce staffing and
office space overhead which can result in more competitive pricing of
services and products.
The Internet can provide a more economical form of advertising. %
website with ecommerce capabilities actually draws people bac"C
building brand loyalty and awareness which are rare in mainstream
advertising.
The fear of clients not using the Internet is becoming a myth.
Consumers have become net-savvy and if clients aren=t using the
Internet todayC soon they will have toD ;9ainstream< advertising will
increasingly play a bigger part in directing people to the website.
Integrated payments with 2an"ing and %ccounting are possible thereby
providing robust support for accounting systems.
In e-commerce, the interaction with the system ta"es place in almost
real time and therefore allows the customer or bidder to respond more
)uic"ly and reduces the lag time between discussion and purchase.
The greatest and the most important advantage of e-commerce, is that it
enables a business concern or individual to reach the global mar"et. It
caters to the demands of both the national and the international mar"et,
as your business activities are no longer restricted by geographical
boundaries. !ith the help of electronic commerce, even small
enterprises can access the global mar"et for selling and purchasing
products and services. $ven time restrictions are none#istent while
conducting businesses, as e-commerce empowers one to e#ecute
business transactions ?@ hours a day and even on holidays and
wee"ends. This in turn significantly increases sales and profit.
$lectronic commerce gives the customers the opportunity to loo" for
cheaper and )uality products. !ith the help of e-commerce, consumers
can easily research on a specific product and sometimes even find out
the original manufacturer to purchase a product at a much cheaper price
than that charged by the wholesaler. hopping online is usually more
convenient and time saving than conventional shopping. 2esides these,
people also come across reviews posted by other customers, about the
products purchased from a particular e-commerce site, which can help
ma"e purchasing decisions.
Eor business concerns, e-commerce significantly cuts down the cost
associated with mar"eting, customer care, processing, and information
storage and inventory management. It reduces the time period involved
with business process re-engineering, customization of products to
meet the demand of particular customers, increasing productivity and
customer care services. $lectronic commerce reduces the burden of
infrastructure to conduct businesses and thereby raises the amount of
funds available for profitable investment. It also enables efficient
customer care services. :n the other hand, It collects and manages
information related to customer behavior, which in turn helps develop
and adopt an efficient mar"eting and promotional strategy.
Disa!'anta(es of Electronic-commerce
$lectronic commerce is also characterized by some technological and
inherent limitations which has restricted the number of people using
this revolutionary system. :ne important disadvantage of e-commerce
is that the Internet has still not touched the lives of a great number of
people, either due to the lac" of "nowledge or trust. % large number of
people do not use the Internet for any "ind of financial transaction.
ome people simply refuse to trust the authenticity of completely
impersonal business transactions, as in the case of e-commerce. 9any
people have reservations regarding the re)uirement to disclose personal
and private information for security concerns. 9any times, the
legitimacy and authenticity of different e-commerce sites have also
been )uestioned.
%nother limitation of e-commerce is that it is not suitable for perishable
commodities li"e food items. Feople prefer to shop in the conventional
way than to use e-commerce for purchasing food products. o e-
commerce is not suitable for such business sectors. The time period
re)uired for delivering physical products can also be )uite significant in
case of e-commerce. % lot of phone calls and e-mails may be re)uired
till you get your desired products. 4owever, returning the product and
getting a refund can be even more troublesome and time consuming
than purchasing, in case if you are not satisfied with a particular
product.
Thus, on evaluating the various pros and cons of electronic commerce,
we can say that the advantages of e-commerce have the potential to
outweigh the disadvantages. % proper strategy to address the technical
issues and to build up customers trust in the system, can change the
present scenario and help e-commerce adapt to the changing needs of
the world.
UNI)UE FE%TURES OF E-COMMERCE
TEC*NO+O&,
.bi)uity
>lobal /esearch
.niversal tandards
/ichness
Interactivity
Information 'ensity
Fersonalization5customization
$ase of automated processingC
Immediacy of resultC
:penness and accessibility of payment processesC
6oss of collateral informationC
>lobalizationC and
$mergence of new business models.
U$i-"it.
Internet5web technology is available everywhere at home, wor" and
any where else.
B"siness Si(nificance
The mar"et place is e#tended beyond traditional boundaries and is
removed from a temporal and geographical location. 9ar"etplace is
created shopping can ta"e place any where customer convenience is
enhanced and shopping costs are reduced.
&lo$al Researc#
The technology reaches across national boundaries around the earth.
B"siness Si(nificance
Commerce is enabled across cultural and national boundaries
seamlessly and without modification mar"et place includes potentially
billions of consumers and millions of business world wide.
Uni'ersal Stan!ar!s
There is one set of technology standards namely internet standard.
B"siness Si(nificance
There is none set of technical media standards across the globe.
Ric#ness
3ideo, audio and te#t messages are possible
B"siness Si(nificance
3ideo, audio and te#t mar"eting messages are integrated into a single
mar"eting message and consuming e#perience.
Interacti'it.
The technology wor"s through interaction with the te#t
B"siness Si(nificance
Consumers are engaged in a dialog that dynamically ad-usts the
e#perience to the individual and ma"e s the consumer a co participant
in the process of delivering goods to the mar"et.
Information Densit.
The technology reduces information costs and raises )uality
B"siness Si(nificance
Information processing, storage and communication costs dramatically
while currency, accuracy and timeless improve greatly. Information
becomes plentiful, cheap and accurate.
/ersonali0ation1C"stomi0ation
The technology allows personalized message to be delivered to
individual as well as groups.
B"siness Si(nificance
Fersonalization of mar"eting g messages and customization of products
and services are based on individual characteristics.
Ease of %"tomate! /rocessin(
% payer can now cheaply and easily automate the generation and
processing of multiple payments with minimal effort. Freviously, the
dependency upon ban"s to handle most payments and the lac" of a
cheap, ubi)uitous communications technology made automation of
payment processes e#pensive and difficult to establish.
Imme!iac. of res"lt
Fayment immediacy occurs because automation and the ability for the
intermediate systems and providers to process payments in real-time.
!ith the more manual, paper-based systems there was always a time
delay due to the re)uirement for human intervention in the process.
Openness an! accessi$ilit.
The availability of cheap computing and communications technology
and the appropriate software enables small enterprises and individuals
to access or provide a range of payment services that were previously
only available to large organizations via dedicated networ"s or the
transactional processing units of ban"s.
+oss of collateral information
The new technology dispenses with, or alters, collateral information
accompanying transactions. This information has traditionally been part
of the transaction, and has been relied upon by the transacting parties to
validate individual payments.
Collateral information can be defined as informationG
H !hich is not essential to the meaning and intent of a transaction7
H !hich is typically incidental to the nature of the communications
channel over which the transaction is conductedC but nevertheless
H provides useful conte#tual information for one or more of the parties
to the transaction.
Collateral information can include many things ranging from tone of
voice in a telephone call to the business cards and letterheads and
apparent authority of the person with whom you are dealing.
8ow that information is received only via a single channel (such as an
electronic message) new processes need to be put in place to support
and reinforce payments in the same way as manual systems.
&lo$ali0ation
>lobalization, or the minimization of geographical factors in ma"ing
payments, has been an obvious aspect of the new payments systems. Its
affect is upon areas such as size of the payments mar"etplace,
uncertainty as to legal -urisdiction in the event of disputes, location and
availability of transaction trails, and the ability of a payment scheme to
rapidly adapt to regulatory regimes imposed by one country by moving
to another.
Ne B"siness Mo!els
8ew business models are being developed to e#ploit the new payment
technologies, in particular to address or ta"e advantage of the
disintermediation of customers from traditional payment providers such
as ban"s.
In this conte#t, disintermediation is where the technology enables a
third party to intervene between the customer and the ban"ing system,
effectively transferring the customer=s trusted relationship with the
ban" to the new party.
T,/ES OF E-COMMERCE
:pportunities evolve rapidly in the e-commerce mar"et segments. 4ere
are the different types of e-commerce solutions you can opt forG
B"siness-to-$"siness 2B3B4 e-commerce:
2?2 is defined as e#changing of structured messages with other
business partners over private networ"s or Internet to create and
transform business relationships. 2?2 e-commerce is companies
buying from and selling to each other online. It(s evolved to encompass
supply chain management as more companies outsource parts of their
supply chain to their trading partners. 2?2 applications aim at
improving and simplifying the various business processes within a
company and increasing efficiency of transactions among companies
that have business relations. The companies use 2?2 in order to
achieve faster and error-free transactions, control and maintain limited
inventory, efficient product refill, etc.

B"siness-to-cons"mer 2B3C4 e-commerce:
2?C ordinarily refers to online trading and auctions. Eor e#ample,
online stoc" trading mar"ets, on-line auction for computers and other
goods. 2?C e-commerce refers to the emerging commerce model
where companies and consumers interact electronically or digitally in
some way. :ne of the best e#amples of 2?C e-commerce is
%mazon.comC an online boo"store that launched its site in *00I. This
type of e-commerce application has grown during the last few years
especially after the widespread use of the Internet and the improvement
of the services offered over the Internet. The solution can support
effective promotion of products and services to all "inds of potential
customers.
Cons"mer-to-$"siness 2C3B4 e-commerce:
C?2 is a rather peculiar Internet phenomenon. %n e#ample of C?2 e-
commerce could be the following. % student wants to fly from 6ondon
to 8ew Jor", but has only K?LL (M1?L) in the ban" to pay for this round
trip. They put up an ad in an Internet C?2 site, see"ing airlines that are
willing to offer the transatlantic round trip for K?LL or less. The beauty
of the Internet is that it brings together a large number of customers to
create a mar"etplace that a number of airlines (that will have to
otherwise fly with empty seats) will be interested in.
Cons"mer-to-cons"mer 2C3C4 e-commerce:
C?C is the Internet e)uivalent of the traditional classified advertising
mar"et. Jou put up an ad on the Internet for other consumers to respond
to (similar to a newspaper classified ad). The Internet ma"es the
process of placing an ad cheaper, faster and easier.
Consumer-to-government (C?>) e-commerce, 2usiness-to-government
(2?>) e-commerce and m-Commerce (9obile commerce) are other
options that are gaining importance today.
TEC*NO+O&, USE IN E-COMMERCE
$lectronic commerce, commonly "nown as e-comm, e-commerce or
eCommerce, consists of the buying and selling of products or services
over electronic systems such as the Internet and other computer
networ"s. The amount of trade conducted electronically has grown
e#traordinarily with widespread Internet usage. The use of commerce is
conducted in this way, spurring and drawing on innovations in
electronic funds transfer, supply chain management, Internet mar"eting,
online transaction processing, electronic data interchange ($'I),
inventory management systems, and automated data collection systems.
9odern electronic commerce typically uses the !orld !ide !eb at
least at some point in the transaction(s lifecycle, although it can
encompass a wider range of technologies such as e-mail, mobile
devices and telephones as well.
% large percentage of electronic commerce is conducted entirely
electronically for virtual items such as access to premium content on a
website, but most electronic commerce involves the transportation of
physical items in some way. :nline retailers are sometimes "nown as e-
tailers and online retail is sometimes "nown as e-tail. %lmost all big
retailers have electronic commerce presence on the !orld !ide !eb.
$lectronic commerce that is conducted between businesses is referred
to as business-to-business or 2?2. 2?2 can be open to all interested
parties (e.g. commodity e#change) or limited to specific, pre-)ualified
participants (private electronic mar"et). $lectronic commerce that is
conducted between businesses and consumers, on the other hand, is
referred to as business-to-consumer or 2?C. This is the type of
electronic commerce conducted by companies such as %mazon.com.
:nline shopping is a form of electronic commerce where the buyer is
directly online to the seller(s computer usually via the internet. There is
no intermediary service. The sale and purchase transaction is completed
electronically and interactively in real-time such as %mazon.com for
new boo"s. If an intermediary is present, then the sale and purchase
transaction is called electronic commerce such as e2ay.com.
$lectronic commerce is generally considered to be the sales aspect of e-
business. It also consists of the e#change of data to facilitate the
financing and payment aspects of the business transactions.
Commerce sites
Commerce sites must be available ?@ hours a day,
B days a wee". /e)uirements includeG
/eliable servers
2ac"up servers for high availablity
$fficient and easily upgraded software
ecurity software
'atabase connectivity
2?2 sites also re)uire certificate servers to issue
and analyze electronic authentication information.
5e$sites Examples
www.amazon.com
www.facebook.com
www.myspace.com
www.alibaba.com
www.google.com
www.yahoo.com
www.msn.com
www.ebay.com