E-COMMERCE

BCA - 402

BLOCK 1:
REVOLUTION AND BASICS
OF E- COMMERCE

Dr. Babasaheb Ambedkar Open University

Ahmedabad
 E-COMMERCE

Knowledge Management and

Research Organization
Pune
Editorial Panel

Author
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ROLE OF SELF INSTRUCTIONAL MATERIAL IN DISTANCE LEARNING

The need to plan effective instruction is imperative for a successful

distance teaching repertoire. This is due to the fact that the instructional
designer, the tutor, the author (s) and the student are often separated by
distance and may never meet in person. This is an increasingly common
scenario in distance education instruction. As much as possible, teaching by
distance should stimulate the student's intellectual involvement and
contain all the necessary learning instructional activities that are capable of
guiding the student through the course objectives. Therefore, the course /
self-instructional material are completely equipped with everything that
the syllabus prescribes.
To ensure effective instruction, a number of instructional design
ideas are used and these help students to acquire knowledge, intellectual
skills, motor skills and necessary attitudinal changes. In this respect,
students' assessment and course evaluation are incorporated in the text.
The nature of instructional activities used in distance education self-
instructional materials depends on the domain of learning that they
reinforce in the text, that is, the cognitive, psychomotor and affective. These
are further interpreted in the acquisition of knowledge, intellectual skills
and motor skills. Students may be encouraged to gain, apply and
communicate (orally or in writing) the knowledge acquired. Intellectual-
skills objectives may be met by designing instructions that make use of
students' prior knowledge and experiences in the discourse as the
foundation on which newly acquired knowledge is built.
The provision of exercises in the form of assignments, projects and
tutorial feedback is necessary. Instructional activities that teach motor skills
need to be graphically demonstrated and the correct practices provided
during tutorials. Instructional activities for inculcating change in attitude
and behavior should create interest and demonstrate need and benefits
gained by adopting the required change. Information on the adoption and
procedures for practice of new attitudes may then be introduced.
Teaching and learning at a distance eliminates interactive
communication cues, such as pauses, intonation and gestures, associated
with the face-to-face method of teaching. This is particularly so with the
exclusive use of print media. Instructional activities built into the
instructional repertoire provide this missing interaction between the
student and the teacher. Therefore, the use of instructional activities to
affect better distance teaching is not optional, but mandatory.
Our team of successful writers and authors has tried to reduce this.
 Divide and to bring this Self Instructional Material as the best teaching
and communication tool. Instructional activities are varied in order to assess
the different facets of the domains of learning.
Distance education teaching repertoire involves extensive use of self-
instructional materials, be they print or otherwise. These materials are
designed to achieve certain pre-determined learning outcomes, namely goals
and objectives that are contained in an instructional plan. Since the teaching
process is affected over a distance, there is need to ensure that students actively
participate in their learning by performing specific tasks that help them to
understand the relevant concepts. Therefore, a set of exercises is built into the
teaching repertoire in order to link what students and tutors do in the
framework of the course outline. These could be in the form of students'
assignments, a research project or a science practical exercise. Examples of
instructional activities in distance education are too numerous to list.
Instructional activities, when used in this context, help to motivate students,
guide and measure students' performance (continuous assessment)
PREFACE
We have put in lots of hard work to make this book as user-friendly
as possible, but we have not sacrificed quality. Experts were involved in
preparing the materials. However, concepts are explained in easy language
for you. We have included many tables and examples for easy
understanding.
We sincerely hope this book will help you in every way you expect.
All the best for your studies from our team!
 E-COMMERCE
Contents

BLOCK 1: REVOLUTION AND BASICS OF E- COMMERCE

UNIT 1 THE REVOLUTION IS JUST BEGINNING
Introduction, What is E-commerce?, The Difference between E-
commerce and E-business, Why Study E-commerce?, Seven Unique
Feature of Ecommerce, Types of E-commerce , Growth of the Internet
and the Web, Origins and Growth of E-commerce, Technology and E-
commerce in Perspective, E-commerce I and II
UNIT 2 A SHORT HISTORY OF DOT COM IPOS
Introduction, E-commerce Today: Successes and Failures, Predictions
for the Future, Understanding E-commerce: Organizing Themes,
Technology: Infrastructure, The Internet and the Evolution of
Corporate Computing, Business: Basic Concepts, Academic Disciplines
Concerned with Ecommerce
UNIT 3 ELECTRONIC COMMERCE
Introduction, Advantages of E-commerce, Electronic Data Interchange,
Benefits of Electronic Data Interchange (EDI), Electronic Commerce
over the Internet, Internet Commerce Examples

BLOCK 2: E-COMMERCE PROCESS AND IMPLEMENTATION

UNIT 1 ELECTRONIC COMMERCE (EC) STRATEGY AND

IMPLEMENTATION
Introduction, Strategic Planning For EC, Industry and Competitive
Analysis, Strategy Formulation, Critical Success Factors for EC, A Value
Analysis Approach, Electronic Commerce Scenarios, Strategic Planning
Framework: Competitive Versus Cooperative Strategies, Competitive
Strategies and Cooperative Strategies, Electronic Commerce Strategy
in Action, The Steps to Successful EC Programs, Competitive
Intelligence on the Internet, Using Push Technology for Competitive
 Intelligence, Implementation: Plans and Execution, Electronic
Commerce Leadership, Creating a Web Team and Assigning Functional
Skills to Subproject, Measuring Result, Collecting Information
UNIT 2 E - COMMERCE PROCESS AND PAYMENT SOLUTIONS
Introduction, Solutions, Internet Access Solutions, Professional
Experts to Design Solutions, Areas of Solutions, Solutions Provider,
Online Commerce Solution, Solutions for Successful E-commerce,
Advantages of E-commerce Solution, Technology Standards for E-
commerce, Shopping Cart, Merchant Account – Meaning and Nature,
Payment System, Internet Payment Features and Internet Payment
services (IPS)

BLOCK 3: E-COMMERCE AND INTERNET

UNIT 1 INTERNET AND THE WORLD WIDE WEB

Introduction, The Internet Today, The World Wide Web, Internet
Service Providers, Stability and Reliability of the Web, Marketing and
Selling Products and Services, Triggering New Businesses, Others
Threats
UNIT 2 INTERNET ARCHITECTURE
Introduction, What is a Network?, More about Networks, Information
Transfer, Packets and Protocol, Internet Protocols: The OSI Reference
Model, Other Networks, Cable Type, Wireless Technology
UNIT 3 THE INTERNET IN INDIA AND INTERNET SECURITY
Introduction, ERNET Network, Indian Market by Value, The New ISP
Policy, Laws for E-commerce in India, Internet Security, Setting up
Security Association, Firewalls, Overview of the Internet Security
BLOCK 4: E-COMMERCE WEBSITES AND E- BANKING

UNIT 1 E - COMMERCE WEBSITES

Introduction, Website: The Concept, Types of Web Sites, Methods of
Promoting Site and Searching the Web, Factors for Growth of Web,
Web Page, Types of Web Design, Some-E-commerce Websites,
Software Tools, Ecommerce Hosting Services, Website Service
Providers, Some Popular Websites, Some Indian Websites, Working of
Web Track
UNIT 2 E - BANKING ONLINE
Introduction, The Concept and Meaning, The Electronic Delivery
Channel Includes, Automatic Teller Machine (ATM), Electronic Fund
Transfer, Computerization in Clearing Houses, Updating Bank Saving
Accounts, Financial Transaction Terminals (FTT), E– Banking in India
and E-Cheque, Security of Internet Banking
 Dr. Babasaheb BCA - 402
Ambedkar
Open University

E- COMMERCE

BLOCK 1: REVOLUTION & BASICS OF E- COMMERCE

UNIT 1
THE REVOLUTION IS JUST BEGINNING 03

UNIT 2
A SHORT HISTORY OF DOT COM IPOS 23

UNIT 3
ELECTRONIC COMMERCE 37
BLOCK 1: REVOLUTION AND BASICS
OF E - COMMERCE
Block Introduction
E-commerce is normally any business transaction which gets performed
over computer network which makes use of transferring of ownership or rights to
use goods and services. IPOs at the elevation of the dot-com effervescence in
2000 were marketed at a conventional price-to-sales ratio of almost 6 cycles
closing year‟s level, according to data constituted by Jay Ritter.

In this block, we will detail about the basic concept of electronic commerce
and its origination. The block will focus on the study and concept of activities
related to e-commerce along with its features. You will give an idea on advantages
and disadvantages of e-commerce.

In this block, you will make to learn and understand about the basic of
programmed DMA input output management techniques. The concept related to
input output supervisors and input output drivers will also be explained to the
students. The student will be demonstrated practically about e-commerce concepts
by stated examples.

Block Objective
After learning this block, you will be able to understand:

 The needs of E-commerce

 About Seven Unique Feature of Ecommerce

 Study the various types of E-commerce

 Idea about growth of Internet and Web

 Basic Origins and Growth of E-commerce

 Understanding E-commerce with Organizing Themes

 Reading about Evolution of Corporate Computing

 Features of E-commerce

 Basic of Electronic Data Interchange

 Benefits of Electronic Data Interchange

1
Revolution and Block Structure
Basics of E -
Commerce Unit 1: The Revolution is Just Beginning

Unit 2: A short History of Dot Com IPOs

Unit 3: Electronic Commerce

2
UNIT 1: THE REVOLUTION IS JUST
BEGINNING
Unit Structure
1.0 Learning Objectives
1.1 Introduction

1.2 What is E-commerce?

1.3 The Difference between E-commerce and E-business

1.4 Why Study E-commerce?

1.5 Seven Unique Feature of Ecommerce

1.6 Types of E-commerce

1.7 Growth of the Internet and the Web

1.8 Origins and Growth of E-commerce

1.9 Technology and E-commerce in Perspective
1.10 E-commerce I and II

1.11 Let Us Sum Up

1.12 Answers for Check Your Progress

1.13 Glossary
1.14 Assignment
1.15 Activities
1.16 Case Study

1.17 Further Readings

1.0 Learning Objectives

After learning this Unit, you will be able to understand:

 About E-commerce

 About the difference among E-commerce and E-business

 About Unique Feature of Ecommerce

3
Revolution and  About the types of E-commerce
Basics of E -
Commerce

1.1 Introduction
People are interested in shopping and advance on online retail where
consumers will able to shop anytime and from any part of world. Shopping online
can be done anytime and can work with 24x7 atmosphere. With this, e-commerce
transforms business model and changed with view of approach of retail shoppers.
Notwithstanding its momentous effect on shopping atmosphere, on the other hand,
e-commerce appears to be more revolutionary which acts as evolution. Normally,
certain retailers and manufacturers will recognize certain opportunities which
exist due to new technology.
It is noted that many categories isn‟t capitalized yet based on certain
opportunities which can be consumer packaged goods purchase that can be done
online which normally follows certain categories such as apparel, electronics and
media.

1.2 What is E-commerce?

E-commerce is electronic commerce which results as buying and selling of
goods and services along with business transactions which can be performed
through electronic network mainly with the help of Internet. Such business
transactions will exists from:

 Business-to-business

 Business-to-consumer

 Consumer-to-consumer

 Consumer-to-business

E-commerce works with many applications such as by:

 Email

 Fax

 Online Catalogs

 Shopping Carts

 Electronic Data Interchange (EDI)

4
 File Transfer Protocol The
Revolution is
 Web services Just Beginning
We see that many of these listed are business-to-business where certain
companies attempts to utilize email and fax for unwanted advertisements to
consumers and different other business prospects by way of e-newsletters to
subscribers.
We see that people uses word ecommerce or online shopping which shows
mechanism of locating and selecting products available in online catalogues with
further checking out by applying credit card payment system. Internet sales are
increasing rapidly since consumer‟s takes benefit of:

 Low pricing by vendors by keeping less margin

 More convenience of delivery of product by comparing it with cost of time

and transport

 Cheap sourcing of product from overseas vendors

 Wide variety and inventory by online stores

 Comparison engines that compare and recommend product

 Best and competitive rates by using auction sites for goods

Check your progress 1

1. What is E-commerce?
a. A branch of commerce

b. exchange of services over electronic network

c. computer program dealing in accountancy problems

d. None of these

1.3 The Difference between E-commerce and E-business

E-commerce is normally any business transaction which gets performed
over computer network which makes use of transferring of ownership or rights to
use goods and services. E-commerce will cover transactions that are done through:

 Internet
5
Revolution and  Intranet
Basics of E -
Commerce  Extranet

 World Wide Web

 Email

 Fax
E-business is wider concept of e-commerce which covers transaction that
depends on e-commerce businesses which are either by traditionally traders that
caters online activities. It is found that e-business will run in any part of internal
processes that is online which covers:

 inventory management

 risk management

 finance

 human resources

It is noted that for any business to act as e-commerce or e-business, it is

noted that that business should cater selling of products online and handling
different company activities along with extra sales which can be offline.
It is found that both e-commerce and e-business will take care about
creation of new value chains that can be among company and customers and with
suppliers that to be worked out within the company itself. Current is is noted that
both internet and electronic networks results as important to ignore in today's
economy, result in all business to have certain level of e-commerce strategy. It is
logical that on growing of business, the idea to implement e-business strategy
result in complication to be carried out.

Check your progress 2

1. Which of the following is true about E-commerce and E-business?

a. E-commerce is trading over internet.

b. E-business involves inventory management, risk management, finance

c. They involves creation of new value chains between a company and its
customers and suppliers

d. D. All of these

6
 The
1.4 Why Study E-commerce?
Revolution is
With more and more advancement and increasing popularity of Internet and Just Beginning
web technology, businesses results in alteration. With this alteration, many
businesses nowadays are done through electronic commerce. It is noted that
initially, e-commerce started when organisations transforms from paper to
digitization formats for handling and controlling of information to do business
transactions. This e-trend of business achieved importance in reality of e-
commerce as government is working on information technology as means to
transform electronic government.
With more and more interference of web and internet facilities, adapting
latest technology occurs mostly in many business domains that come into
existence when business transactions are performed with the help of information
technology. E-commerce is mainly applied in transactions that occur among:

 businesses and consumers

 businesses and businesses

 internal company operations

It is found that e-commerce technology is different and strong from earlier
technologies as it results in fundamental changes to commerce that are currently in
growth. E-commerce is nowadays very popular as:

 Business works on internet and results in more and more customers as

compared to normal retailing.

 Business lowers destination barriers as consumer will able to purchase

anything on a mouse click across any part of globe.

 Business cutoff expenses which are applied on setting on shop as compared

to online sale which will save all necessary extra cost.

Check your progress 3

1. What are the advantages of E- commerce?
a. It reduces destination barriers

b. Using E-commerce is less costly than running actual business

c. Customers can be easily attracted

d. All of these

7
Revolution and 1.5 Seven Unique Feature of Ecommerce
Basics of E -
Commerce In e-commerce we see that there are seven kinds of unique features which
are applied in functioning of e-commerce website such as:

Ubiquity:
In general business market, access to treatment through circulation of
document exists. It is seen that clothes and shoes normally influence the
customers as the comes in necessity dressing items.

Global Reach:
With e-commerce, business transactions can be performed across the
country which results in more convenience and are effective with normal
commerce. With e-commerce, businesses results in potential market that can be
carried out across wide network population.

Universal Standards:
With an e-commerce technology, technical standard of Internet results in
sharing across countries. The standard will affect market entry cost with cost of
goods on the market which makes technology business easy by lowering cost
applied with varied techniques of indirect costs along with cost of commerce
website per month.

Richness:
It is noted that advertising and branding serves as an essential portion of any
commerce. With e-commerce, you can deliver video, audio, animation, billboards,
signs and etc.

Interactive:
E-commerce business today is interactive as it allows two-way
communication which happens among businesses and consumers.

Information Density:
With the invent of internet, the density in information has greatly improved
since total amount of all markets consumers and businesses tends in improving
quality of information. It lowers the information collection, storage,
communication and processing cost and results in saving time and accuracy.

Personalization:

8
 The e-commerce technology involves in personalization as business tends to The
adjusted name, interests and purchase message objects with marketing message Revolution is
Just Beginning
that are received to the consumers.

Check your progress 4

1. What is interactivity in E-commerce?
a. accuracy and timeliness of the information

b. Advertising and branding

c. Two-way communication between businesses and consumers.

d. None of these
2. What is meant by global reach feature?

a. Allowing business transactions on the cross country bound

b. Total amount of all markets, consumers and businesses quality
information.

c. Maintaining standards
d. Adjusting business for a name

1.6 Types of E-commerce

Normally it is noticed that when we think of e-commerce, we think for
online commercial transaction among supplier and consumer. It is seen that at the
same time, such idea is correct as we can be specific and real based on following
types of e-commerce characteristics such as:

 Business-to-Business (B2B)

 Business-to-Consumer (B2C)

 Consumer-to-Consumer (C2C)

 Consumer-to-Business (C2B)

 Business-to-Administration (B2A)

 Consumer-to-Administration (C2A)

9
Revolution and 1. Business-to-Business (B2B)
Basics of E -
Commerce Business-to-Business (B2B) Business-to-business e-commerce are
considered in a number of ways that makes them very different to their consumer
counterparts. The shared approach in business-to-business markets is to apply a
market segmentation based on firm size. The consumption levels of business-to-
business customers are so widely diverse that this often makes sense due to large
corporations usually thinking and acting differently to small ones.
2. Business-to-Consumer (B2C)

Business-to-Consumer type of e-commerce is different from establishment

of electronic business relationships which occurs among businesses and real
customers. It is related to retail section of e-commerce, where normal retail
business happens.

3. Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C) type e-commerce includes every electronic
transaction of goods or services which is carried out among customer. Such
transactions are normally carried out using third party that gives an online
platform for transactions to be performed.
4. Consumer-to-Business (C2B)

Consumer-to-Business type e-commerce shows reversal of traditional of

exchanging goods which is important in case of crowd sourcing projects. In this,
many retailers made their services or products available for purchase to companies
that needs such types of services or products.

5. Business-to-Administration (B2A)
Business-to-Administration type of e-commerce will include transactions
that are done online among companies and public administration. It uses heavy
amount and wide services especially like fiscal, social security, employment, legal
documents and registers, etc.
6. Consumer-to-Administration (C2A)

Consumer-to-Administration e-commerce type model will take care of all

electronic transactions that are performed among individuals and public
administration.

10
 The
Check your progress 5 Revolution is
1. Which of the following type of e-commerce encompasses all electronic Just Beginning
transactions of goods or services conducted between consumers?

a. Consumer-to-Consumer (C2C)
b. Consumer-to-Business (C2B).

c. Business-to-Administration (B2A)
d. None of these

1.7 Growth of the Internet and the Web

It is found that internet appears an interconnection among laboratories
which are performing in government research. Since 1994, with its expansion,
millions of users and multitude of purposes results in every portion of globe. In
short spall, internet combines itself as powerful platform which changes evermore
in the way the business performs and way the business communicate. Internet
being strong communication media results in strong global dimensions across the
globe. It serves as a universal source of information for millions of people, at
home, at school, and at work. Internet is changing all the time with two important
points of evolution such as:

 Social web

 Mobile technology
Such innovations altered the way people uses Internet. In social web circle,
people obtained new way of communication. From 2004, origin of Facebook
appears in worldwide network with its users around 1,100 million. With the invent
of Mobile technology, more and more people can communicate easily and quickly
across globe.

In terms of demographics, internet appears as most advantages for mass

media activities. Using small investment, anyone makes its own web page and
launch on Internet. With this, business also reaches across large market, directly,
fast and economically without any particular business size model. Blogging has
consolidated the social media and the people everywhere are expressing and
publishing their ideas and opinions like never before. The table below describes
the history and growth of Internet from 1995 till Today.

11
Revolution and
Basics of E - NUMBER OF % WORLD
DATE
Commerce USERS POPULATION

December, 1995 16 millions 0.4 %

December, 1996 36 millions 0.9 %

December, 1997 70 millions 1.7 %

December, 1998 147 millions 3.6 %

December, 1999 248 millions 4.1 %

March, 2000 304 millions 5.0 %

July, 2000 359 millions 5.9 %

December, 2000 361 millions 5.8 %

March, 2001 458 millions 7.6 %

June, 2001 479 millions 7.9 %

August, 2001 513 millions 8.6 %

April, 2002 558 millions 8.6 %

July, 2002 569 millions 9.1 %

September, 2002 587 millions 9.4 %

March, 2003 608 millions 9.7 %

September, 2003 677 millions 10.6 %

12
 The
October, 2003 682 millions 10.7 % Revolution is
Just Beginning
December, 2003 719 millions 11.1 %

February, 2004 745 millions 11.5 %

May, 2004 757 millions 11.7 %

October, 2004 812 millions 12.7 %

December, 2004 817 millions 12.7 %

March, 2005 888 millions 13.9 %

June, 2005 938 millions 14.6 %

September, 2005 957 millions 14.9 %

November, 2005 972 millions 15.2 %

December, 2005 1,018 millions 15.7 %

March, 2006 1,023 millions 15.7 %

June, 2006 1,043 millions 16.0 %

Sept, 2006 1,086 millions 16.7 %

Dec, 2006 1,093 millions 16.7 %

Mar, 2007 1,129 millions 17.2 %

June, 2007 1,173 millions 17.8 %

Sept, 2007 1,245 millions 18.9 %

13
Revolution and
Basics of E - Dec, 2007 1,319 millions 20.0 %
Commerce
Mar, 2008 1,407 millions 21.1 %

June, 2008 1,463 millions 21.9 %

Sept, 2008 1,504 millions 22.5 %

Dec, 2008 1,574 millions 23.5 %

Mar, 2009 1,596 millions 23.8 %

June, 2009 1,669 millions 24.7 %

Sept, 2009 1,734 millions 25.6 %

Dec, 2009 1,802 millions 26.6 %

June, 2010 1,966 millions 28.7 %

Sept, 2010 1,971 millions 28.8 %

Mar, 2011 2,095 millions 30.2 %

Jun, 2011 2,110 millions 30.4 %

Sept, 2011 2,180 millions 31.5 %

Dec, 2011 2,267 millions 32.7 %

Mar, 2012 2,336 millions 33.3 %

June, 2012 2,405 millions 34.3 %

Sept, 2012 2,439 millions 34.8 %

14
 The
Dec, 2012 2,497 millions 35.7 % Revolution is
Just Beginning
Dec, 2013 2,802 millions 39.0 %

June, 2014 3,035 millions 42.3 %

Dec, 2014 3,079 millions 42.4 %

June, 2015 3,270 millions 45.0 %

Dec, 2015 3,366 millions 46.4 %

Check your progress 6

1. Internet is:
a. Network of Computers

b. Connecting Single Computer in network

c. Connecting different Computers in network

d. all of these

1.8 Origins and Growth of E-commerce

Electronic commerce (e-commerce) continues the approach of trading
against the Internet, i.e. a consumer visits an agent's website furthermore
formulates a transaction there. Less firmly it encompasses approaches where the
Internet performs some role, e.g. favouring the consumer in establishing or
matching products and/or sellers.

The modernization approach commenced in 1977, when the fixed editorial

assembly of the American Law Institute along with the National Conference of
Commissioners on Uniform State Laws apportioned up a committee to examine
whether current categories of payment affected a confront to the nation's
constitutional system since they were not enveloped by the UCC. The ALI as
well as the NCCUSL collectively administers the code, which has been
determined by every state except Louisiana. The fixed editorial board, constituted
15
Revolution and of attorneys of two delegations, has the liability for creating expected amendments
Basics of E - to the code. Later an amendment has been arranged, furthermore preceding it can
Commerce
be acknowledged to state legislatures for adoption, and it need be inspected
additionally affirmed by dual organizations.
The consideration of electronic data interchange had been developed by
Edward Guilbert who, as director for the 1948 Berlin Airlift, discovered it badly
depressing to cope with business activities on paper. The documents explaining
the goods attained days later the goods adhered already reached Berlin. For the
time being the Hungarian airlift eight decades later, Guilbert amended the
approach furthermore would not allow a plane take off unless appropriate
evidence preceded it. It had been not until 1966 that he could exercise his
international competence domestically. While functioning for the department of
Transportation, he approved an Office of Facilitation to assign business managers
a venture to report the government how business could correct its productivity if
the government would reduce up modestly on the bureaucracy. Overwhelmed by
the explanation, Guilbert contemplated it would be an excellent concept if
business managers could perform what they discussed. On account of, in 1968, he
along with a few associates created the Transportation Data Coordinating
Committee to benefit the standardization of tariffs for overseas shipments.
E-commerce has endured exceptional increment in the last five years
coupled in terms of the numeral of participants as well as the diversity as well as
refinement of characteristics which e-tailers can utilize to facilitate their product.
Extending advancements in communications technology as well as approach
devices both with an ever richer array of software expediencies which designers
can employ to carry their description across the 'net advice the impact of e-
commerce is developed to advance unabated for the foreseeable future. The
momentum accumulated hence far is feasible to bring about constructive solutions
to prevailing problems alike as security issues as well as representational
complexities.
As brilliant agents benefit more elegant as well as more broadly delivered it
would display that advantage through affectedly high prices will discontinue being
attainable. Merchants of near-identical goods as well as services will expect to
ascribe numerous form of accompanied value to their centre approach in order to
discriminate themselves from their opponents as well as ascend a share of the
market. For those that can fruitfully apprehend this potential rewards are
awesome.

16
 The
Check your progress 7
Revolution is
1. Edward Guilbert was the director of____________. Just Beginning

a. Microsoft

b. Berlin Airlift
c. Google

d. None of these

1.9 Technology and E-commerce in Perspective

As constructive technologies appear, the e-commerce market is evenly
converting furthermore acquiring additional as well as increased luring for
customers by approaching them new benefits as well as contradictory facilities.
Nowadays consumers get facilitated to conveniences quicker than ever. On
account of, it‟s critical for online agents to keep up with the current field
enhancements to gain the apportioning edge on the latest highly economical
online market.
The effectiveness of determining on diversified designs, styles, sizes, colors,
etc. to glance how they observe additionally which items suited better, is exactly
the analysis why numerous people still opt for the common approach of going to
brick-and-mortar stores, when they shop for clothing, shoes, hats, jewellery,
eyeglasses as well as diversified accessories. If you sell online anything from this
material, from here and now on you acquire an extensive opportunity to lure many
new consumers from this consumer audience. Innovative tools for virtual trying-
on as well as fitting will give you the benefit of authorizing your customers to
verify on virtually anything they expect just online to discover ideally appropriate
items from the comfort of their own homes or offices.
The complete conception of virtual fitting as well as sizing continues quite
easy as well as comfortable. While applying a common webcam besides a definite
application encompassed into your web store, your visitors will be able to try on
your goods. The latest technology advancements allow online entrepreneurs to
provide this personalized, customer-tailored shopping experience in a rather easy
and cost-efficient way. There are multiple breakthrough web technologies
available today that are designed to help you interact with your shoppers almost
the same way as in a brick-and-mortar store. Many of them come with a rather

17
Revolution and wide functionality involving personalized greetings, tracking client preferences,
Basics of E - creating client-specific promotions, making dynamic adjustments to prices,
Commerce
gauging the popularity level of every single item in your stock, real-time
consulting and many other options.
You can take advantage of the latest social networking applications to make
it possible for your customers to co-shop. In other words, they will be able to shop
together, while discussing products, prices, features, deals and any other
specifications just in real time, even from different locations around the Globe.

Check your progress 8

1. Which of the following is not the example of business to consumer(BtoC)e-
commerce?
a. Amazon.com

b. google.com
c. ebayl.com

d. lastminute.com

1.9 E-commerce I and II

E-commerce I is an explosive growth period started in 1995 and completes
in 2000 while E-commerce II is present era of e-commerce that starts in year 2001
VISIONS AND FORCES BEHIND E-COMMERCE I
In terms of computer scientist and information technologies, it is noted that
E-commerce I appears to be a strong proof having set of information technologies
which are created before forty years right from development of early internet to
the computer and further to local area networks.
In terms of economists, e-commerce move up in sensible prospect where
price, cost and quality is framed equally having infinite set of suppliers which
fully complete with others where customers have access to important market
information across the globe.
In terms of merchants, cost of searching for customers dips as lowering of
wasteful advertising.

18
So it is seen that E-commerce I period was driven mainly by vision of profiting The
from new technology with stress on fast achieving of high market visibility. Revolution is
Just Beginning
E-COMMERCE II 2001-2007

In E-commerce I many companies results in crashing of stock market which

happens in 2000 which can be through:

Changing of year from 1999 to 2000 is a Y2K period, where companies feel
threat about loosing of data and creation of fresh information technology capital
expenditure declined, sending the earnings forecasts of technology companies
down.
Apart from this, in early 2000, it was clear that telecommunication industry
made excess capacity in high speed fiber optic networks.
In 1999, e-commerce Christmas season results in less sales growth which
was thought that made assuming that the period was not easy.
- Fourth, perhaps more important, the valuations of dot.com and technology
companies had risen so high that even supporters were questioning whether
earning of these companies could ever grow fast enough to justify the prices of the
shares.

Check your progress 9

1. E-commerce I is the era between__________.
a. 1995 to 2000
b. 2000 to 2007

c. 1999 to 2000
d. None of these

2. What are the reasons of crash in stock market in the E- commerce I era?
a. Declining in information technology capital expenditure

b. Valuations of dot.com and technology companies had became risen so

high

c. Less sale growth demonstrated that e-commerce was not easy

d. All of these

19
Revolution and 1.11 Let Us Sum Up
Basics of E -
Commerce In this unit we have learnt that E-commerce is electronic commerce which
results as buying and selling of goods and services along with business
transactions which can be performed through electronic network mainly with the
help of Internet. E-commerce is normally any business transaction which gets
performed over computer network which makes use of transferring of ownership
or rights to use goods and services.
In e-commerce we see that there are seven kinds of unique features which is
applied in functioning of e-commerce website such as. It is seen that there are
many types of e-commerce characteristics such as Business-to-Business (B2B),
Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-
Business (C2B), Business-to-Administration (B2A), Consumer-to-Administration
(C2A).

1.11 Answers for Check Your Progress

Check your progress 1

Answers: (1 -b)

Check your progress 2

Answers: (1 -d)

Check your progress 3

Answers: (1 –d)

Check your progress 4

Answers: (1 -c), (2 –a)

Check your progress 5

Answers: (1 -a)

Check your progress 6

Answers: (1 –d)

20
 The
Check your progress 7 Revolution is
Just Beginning
Answers: (1 –b)

Check your progress 8

Answers: (1 –c)

Check your progress 9

Answers: (1 –a), (2 –d)

1.12 Glossary
1. E-Mail - Messages that sends by computer networks from one person to
another or too many.

2. Electronic Commerce - It involves commercial transactions goods or

services through electronic media.

3. Internet - It is an arrangement of interconnection of computers in networks

through Internet Protocol to communicate with each other.

4. Technology - Art of using latest means to communicate or work with.

1.13 Assignment
Explain the difference between E-commerce and E- business?

1.14 Activities
Study use of technology in E-Commerce

1.15 Case Study

Study evolution of e-commerce.

21
Revolution and 1.16 Further Readings
Basics of E -
Commerce 1. Kenneth C. Laudon, Carol G. Traver (2008). E-Commerce: Business,
Technology, Society, Second Edition.
2. Jim Collins (2001). Good to Great: Why Some Companies Make the Leap...
and Others Don't.

22
UNIT 2: A SHORT HISTORY OF DOT COM
IPOS
Unit Structure
2.0 Learning Objectives
2.1 Introduction

2.2 E-commerce Today: Successes and Failures

2.3 Predictions for the Future

2.4 Understanding E-commerce: Organizing Themes

2.5 Technology: Infrastructure

2.6 The Internet and the Evolution of Corporate Computing

2.7 Business: Basic Concepts

2.8 Academic Disciplines Concerned with Ecommerce

2.9 Let Us Sum Up
2.10 Answers for Check Your Progress

2.11 Glossary
2.12 Assignment

2.13 Activities
2.14 Case Study
2.15 Further Readings

2.0 Learning Objectives

After learning this unit, you will be able to understand:

 About basic concept of Organizing Themes

 About Technology

 About Internet and Evolution of Corporate Computing

23
Revolution and 2.1 Introduction
Basics of E -
Commerce IPOs at the elevation of the dot-com effervescence in 2000 were marketed at
a conventional price-to-sales ratio of almost 6 cycles closing year‟s level,
according to data constituted by Jay Ritter. The dot-com approximation began
when the Fed advanced interest rates in late 1999, retarding the economy and
denting development prospects for Internet firms. Established technology
businesses such as Microsoft Corp. as well as Dell Inc. battered their financial
goals, as well as assigning off alarms to investors in the current Internet markets.
Shares began to drop in March 2000 as compensation as well as retails desires
which is modestly set on metrics such as web traffic that indirectly became too
high for many dot-com companies to gather.

2.2 E-commerce Today: Successes and Failures

E-Commerce is the contemporary approach of imparting business now.
Abundant companies, ancient as well as current acquire commenced adopting the
electronic element. They have appropriated up the appropriateness to allow up a
website as a resources of locating occupancy, electronically. Furthermore, it is the
solid honesty of life that, not all businesses grace achievement. In fact, underneath
are some essential points as to why a business can satisfied a success or a failure:
SUCCESS FACTORS
1. Ascribing approximation to customers

Agents can apprehend this by approaching a product or product-line that

brings possible customers at an economical price, as in non-electronic commerce.

2. Assigning service as well as performance

Attempting an understanding along with user-friendly accumulating
practice.
3. Delivering an alluring website

The classic exercise of colour, graphics, animation, photographs, fonts as

well as white-space fraction may benefit achievement in this respect.

4. Delivering an allotment for consumers to accumulate as well as to revert.

Sales announcements to this end can encompass coupons, special offers as
well as bargains. Cross-linked websites along with broadcasting associate
programs can furthermore help.
24
5. Delivering individual attention A Short History
of Dot Com
Personalized web sites, expenditure suggestions, along with personalized IPOS
distinguishing offers may go numerous of the way to changing for the face-to-face
human interaction found at a conventional point of sale.
6. Delivering a feel of culture.

Chat rooms, conference boards, addressing customer input, obedience

schemes along with attraction programs can help in this regard.
7. Delivering dependability as well as protection.

Parallel servers, hardware excessiveness, fail-safe technology, details

encryption, along with firewalls can advance this requirement.

8. Monopolizing the customer‟s complete experience

E-tailers develop this by rewarding any contacts with customer as part of a
total competence, a sophistication that pleases synonymous with the brand.
9. Allowing customers contribute themselves

Delivery of a self-serve site, comfortable to use without support, can help

this respect.

10. Composing a commercially signal business model

FAILURE FACTORS

1. They are not updated regularly

2. Things never go on sale
3. No coupons are offered
4. It‟s hard to find what you‟re looking for

5. The product-pictures are awful-blurry and amateur

6. The site doesn‟t tell visitors about the owners

7. There is no number, address, email or way to contact the owners

8. The site is designed poorly

9. The Checkout button is not prominent

10. There is no security key at the bottom of the browser

It is noted that in a business, physicality of business simply will not locate

for the success of business, but its presence in virtual world also matters in such
technological age where we are.
25
Revolution and
Basics of E -
Commerce Check your progress 1
1. What are causes of failure of E-commerce business?

a. Providing value to customers

b. There is no security key at the bottom of the browser

c. The site doesn‟t tell visitors about the owners

d. Both B and C

2. What are the reasons of success of E- commerce business?

a. Providing service and performance

b. There is no security key at the bottom of the browser

c. The site doesn‟t tell visitors about the owners

d. All of these

2.3 Predictions for the Future

Authorities forecast a guaranteeing as well as delightful future of
ecommerce in the 21st generation. In the foreseeable tomorrow's ecommerce will
additionally approve itself a major equipment of sale. Fruitful ecommerce will
serve a consideration categorically conforming from the web, on account of e-
shopping exists pleasing more and more notable as well as straightforward. At the
identical time excessive jealousy in the sphere of ecommerce businesses will
emphasize their establishment. Therefore commanding future routes of
ecommerce will be the development of Internet sales as well as evolution.

Each century number of ecommerce approaches grows enormously. Sales

capacities of on-line supermarkets are more than contrasting with those of “brick-
and-mortar” ones. Furthermore the affinity will persevere, on account of a lot of
people are “imprisoned” by function as well as home-made duties, and while
Internet preserves a lot of time furthermore assigns convenience to determine
goods at the foremost prices. Present-day Internet sales burst is the depths for
awesome ecommerce future.
The “quantity to quality” affinity of ecommerce is furthermore attractive
more and more manifest, as the Internet acquires banished geographical factor

26
from the sale. So it doesn‟t matter anymore whether your store is situated in New A Short History
York or London or in a small town. To exist, businesspeople will have to adjust of Dot Com
IPOS
speedily to the current provisions. To bring additional customers e-store-owners
will have not only to expand the number of attainable services, but to pay
additional concentration to comparable constituents like beautiful design, user-
friendliness, approaching goods demonstration, they will have to opportunely
employ modern technologies for their businesses to become parts of ecommerce
future.

Check your progress 2

1. How can more customers get attracted towards e-stores?

a. Increase the number of available services

b. Attractive design
c. Appealing goods presentation

d. All of these

2.4 Understanding E-commerce: Organizing Themes

E-commerce continues higher than complete else a technologically activated
phenomenon that dreams of a host of knowledge technologies as well as
elementary considerations from computer science grown-up over a 50-year period.
E-commerce believes on complete these elementary technologies, not even-
handed the internet. The internet, while approximating a cutting break from past
corporate computing as well as communications technologies, continues
furthermore just the current conception in the evolution of corporate
approximating along with part of the experiencing arrangement of computer based
innovations in business.

While the technology assigns the infrastructure, it exist the activity

applications, the imaginable for exceptional returns on expenditure that develop
the attentiveness as well as anxiety in e-commerce. New technologies alter the
approaches or arrangements continuing firms: Old strategies are made abandoned
along with new ones desire to be invented.

27
Revolution and On account of the internet as well as the web are extraordinarily
Basics of E - authoritative at endeavoring the identity and manner of individuals online, e-
Commerce
commerce raises difficulties for preserving privacy, the aptitude of individuals to
place boundaries on the category along with measure of information assorted
about them, as well as to control the uses of their personal information. The
complete nature of e-commerce furthermore possesses public policy issues of
equity, equal access, content regulation, as well as taxation.

Fig 2.1 Disciplines in E-commerce

Check your progress 3

1. In which of the following disciplines E- commerce can be applied?
a. Finance

b. Computer Science
c. Economics

d. All of these

2.5 Technology: Infrastructure

Information technology (IT) had been one of the highest intensively
examined as well as comprehensively conducted technologies in the 20th decade
furthermore its research as well as exercise will be everlasting additional
advanced in the 21st decade. The impact of IT continues additional far-reaching

28
than several one may acquire embraced considered, encircling complete facets A Short History
along with sectors of society. Moderately, e-commerce developed more than $1.5 of Dot Com
IPOS
trillion in the US in 2004 furthermore subsists projected to be 30, 15 as well as
2.6% of the complete manufacturing, whole sales as well as market sales in the
US in 2006 respectively. IT benchmark in agriculture embraces so far been
characteristically exercised to such fields as exactness farming along with
bioinformatics furthermore in extension as well as farming activities. As
comparable, its possible application in agricultural e-commerce holds only
instituted to be examined. The United States Department of Agriculture has
discovered four contrasting functions that e-commerce firms behave in the
agricultural sector. They are:
(1) Information distribution

(2) Input supply

(3) Commodity trading floor

(4) Logistics/supply chain management

Unlike external industrial products, farm products are much augmented
conflicting as well as complex to process as well as handle. For example, fruits as
well as vegetables are perishable furthermore acquire to extent the market
furthermore the hands of buyers within a low period of time. One of the
difficulties for IT approaches in farming is the deficiency of standard benchmarks
in features along with peculiarity of perishable develop as well as processing
foods. Standards are pre-requisites for productive IT application and e-commerce.
According to the Global Commerce campaign, standards conduct scalability,
portability as well as affordability to the business mechanism. Standards
quickness up the deliver chain furthermore lessen errors furthermore defend
technology investments also assure system to system intercommunication along
with interoperability. Hence the convolution of consequences involved in
standardization, the approach of standardization mandate encompass the input
furthermore discussion from entire segments of the society.
Continuing the largest agricultural country in the globe along with one of
the foremost energetic trading partners in the international market, China need
furthermore be embodied in disclosing the standards for dual domestic as well as
international trades. These measures are the necessary foundations for e-
commerce in agriculture. Finally, we recommend that a national commission to be
fashioned in China, which takes into account of IT experts from private sectors,
academic professionals as well as governmental officials. This working group
29
Revolution and ought to think about the progress being completed in a different place in the world
Basics of E - with one of its kind properties related to Chinese commodities along with suitable
Commerce
business models to determine a set of standard measures that are transportable and
communicable digitally in the world market for China's e-commerce in
agriculture.

Check your progress 4

1. Which of the following functions that E-commerce can perform in
agricultural fields?

a. Information distribution
b. Input supply

c. Commodity trading floor

d. All of these

2.6 The Internet and Evolution of Corporate Computing

Electronic commerce takes account of each and every forms of business
communication, which can be from purchase of goods or services processed by
electronic means through telephones, televisions, computers and Internet. It is
thought that such means through where many business should progress in future.
With increasing total of people interconnecting with Internet, for them, electronic
commerce results in increasing of heavy acceptance. Numerous people think of
electronic commerce which in form of shopping on Internet or on-line which apart
from these are much more. The electronic commerce will impact lives in more
ways than we realize.
Even though electronic commerce includes each and every appearance of
electronic commercial communication, the current commercialization of the
Internet has significantly smoothed the progress of development of electronic
commerce. The foundation of today's Internet was begin with developed U.S.
Government investment in computer networking technology that appeared earlier
in 1960's. The Internet was in the beginning used for linking in addition to
transmitting information between scientists as well as universities undertaking
government sponsored research in miscellaneous locations. In the 1990's, on the
other hand, the network was commercialized. In view of the fact that, amount of

30
business communication taking place by electronic means has developed at an A Short History
excessive rate. In detail, the amount of electronic commerce is projected to of Dot Com
produce from immediately $8 billion in 1997 to fine over $327 billion in the year IPOS

2002.
Products as well as services are orderly in a mixture of ways on the Internet.
For illustration, a lot of retail stores along with catalogue companies at present are
offering their produce on-line for choice as well as procurement by customers.
New on-line or "virtual" stores selling everything from books and CDs to
computer equipment and used automobiles are now open for business on the
World Wide Web. Providers of services such as real estate brokers, insurance
companies along with travel agents furthermore have an on-line existence.
Various airlines, for illustration, put forward economical cyberfares to customers
who put an order for ticket via the Internet.
On the other hand, Internet bargain hunter need not go straight to an on-line
store in charge to buy something. A number of media sites, ISPs, as well as search
engines outstandingly attribute retailers furthermore make available express links
to their sites. Specialty merchant, huge discounters, service companies, as well as
mall/marketplaces from in the region of world have their place on-line.

Check your progress 5

1. Which of the following is one of the most predominant factors in the
credibility of a web site?
a. Information accuracy
b. Design Look

c. Information focus
d. None of these

2.7 Business: Basic Concepts

The e-business perception illustrates the underlying principle of the
commerce, its goals along with revelation, furthermore products or contributions
from which it will bring in returns. A flourishing theory is based on market
investigation to facilitate customers probably to acquire the product along with
total amount wish to pay.
31
Revolution and E-Business will take care of online activities like:
Basics of E -
Commerce  Communications

 Manufacturing

 Processing

 Online buying

 Selling of goods and services

E-Business applications will not only include online business but also will take
care of:

 Education

 Government

 Non-profit organizations

 Goal oriented communities

The idea of e-Business depends on part or goals which lead to becoming major car
seller, bank, or several different commercial enterprises, along with becoming
opponent to quite a lot of well-known firms in both industries. The idea will be
more particular as well as measurable which holds 10% of market or will take care
of $100 million of revenues in five years. These target as well as objectives is
reasonable or not, moreover whether the company is equipped to accomplish these
aspirations is take in hand in business plan process for upcoming companies
furthermore will implement plan for existing firm that takes into consideration the
important alterations. While seeing at business model, it is sufficient to know
about the aims and objectives are, and whether they are being pursued.

Fig 2.2 E-business concept

32
 Implanted in the e-Business consideration are approaches that explain how A Short History
the activity design choice be exercised. These are recognized as corporate of Dot Com
IPOS
approaches since they build in how the business continues considered to function.
These approaches can be altered to advance the behaviour of the business.
Valuing is an considerable constituent of the e-business design further
should be positioned on the cause of market examination. Value is frequent
acknowledged with an eye on the competition as well as can have a straight effect
on market share. In conventional commerce in the U.S., the dealer sets the price.
Online valuing, on the other hand, may encompass assistance or auction pricing,
where the intercommunication of sellers as well as buyers can afterthought the
price. Knowledge of competing prices is furthermore adaptable available online,
furthermore will keep descending pressure on prices.

Assigning value in an e-business utilizes the identical advancement as

ascribing value in some business; furthermore it may mandate contrary
capabilities. Furthermore conventional to dual are the customers who look for out
value in a business transaction. The value arrangement advances focus the
business on the prosperity of the customer, where it stays in fruitful companies.
Favourable supply chains are energetic for fabricating activities because the
convenience, cost as well as achievement of the final product may depend on a
elemental part developed by a single supplier. The experience of agents may here
and now be displayed through the ISO 9000 condition approach, which is
considerable when utilizing suppliers from remote countries or when the final
products are exported.

Check your progress 6

1. E- business includes_________.
a. Communications
b. Manufacturing and processing,

c. online buying and selling of goods and services

b. All of these

33
Revolution and 2.8 Academic Disciplines Concerned with Ecommerce
Basics of E -
Commerce The Academic Disciplines Concerned with E-commerce relates to Technical
as well as Behavioural approach:
Technical approach

 Computer science

 Management science

 Information systems

Fig 2.3 Academic Disciplines

Behavioral approach

 Information system

 Economics

 Marketing

 Management

 Finance/accounting

 Sociology

Check your progress 7

1. Which of the following behavioral approach is followed in E- commerce?

a. Computer science
b. Management science

c. Economics
d. All of these

34
2.9 Let Us Sum Up A Short History
of Dot Com
While studying this unit, we have learnt that IPOs serves as an eleveted of IPOS
dot-com effervescence since 2000 which were marketed at conventional price-to-
sales ratio of 6 cycles closing year‟s level.

It is noted that e-Commerce is contemporary approach of imparting business

now where abundant companies, ancient as well as current acquire commenced
adopting of electronic element.
The quantity to quality affinity of ecommerce is furthermore attractive more
and more manifest, as the Internet acquires banished geographical factor from the
sale.

E-commerce continues higher than complete else a technologically activated

phenomenon that dreams of a host of knowledge technologies as well as
elementary considerations from computer science grown-up over a 50-year period.

2.10 Answers for Check Your Progress

Check your progress 1

Answers: (1 –d), (2 –a)

Check your progress 2

Answers: (1 -d)

Check your progress 3

Answers: (1 –d)

Check your progress 4

Answers: (1 -d)

Check your progress 5

Answers: (1 –a)

Check your progress 6

Answers: (1 –d)
35
Revolution and
Check your progress 7
Basics of E -
Commerce
Answers: (1 –c)

2.11 Glossary
1. Web - A place where interconnectivity and website will work.

2. Web Site - A specific location on the World Wide Web.

3. Electronic Commerce - It involves commercial transactions goods or
services through electronic media.
4. Internet - It is an arrangement of interconnection of computers in networks
through Internet Protocol to communicate with each other.

2.12 Assignment
Explain the causes for success and failure of E- commerce.

2.13 Activities
Study evolution of corporate computing.

2.14 Case Study

Study the academic disciplines where E-commerce can be used?

2.15 Further Readings

1. Kenneth C. Laudon, Carol G. Traver (2008). E-Commerce: Business,
Technology, Society, Second Edition.

2. Jim Collins (2001). Good to Great: Why Some Companies Make the Leap...
and Others Don't.

36
UNIT 3: ELECTRONIC COMMERCE
Unit Structure
3.0 Learning Objectives

3.1 Introduction
3.2 Advantages of E-commerce

3.3 Electronic Data Interchange

3.4 Benefits of Electronic Data Interchange (EDI)

3.5 Electronic Commerce over the Internet

3.6 Internet Commerce Examples

3.7 Let Us Sum Up

3.8 Answers for Check Your Progress

3.9 Glossary
3.10 Assignment

3.11 Activities
3.12 Case Study

3.13 Further Readings

3.0 Learning Objectives

After learning this unit, you will be able to understand:

 About Electronic Data Interchange

 Features of Electronic Data Interchange (EDI)

 About Electronic Commerce over the Internet

3.1 Introduction
Electronic commerce or ecommerce continues a name for numerous
category of business, or commercial exchange that encompasses the exchange of
information across the Internet. It contains an extent of contrary categories of
businesses, from customer based retail sites, through sell or music sites, to

37
Revolution and business bargains trading stocks along with services between businesses. It is
Basics of E - contemporarily one of the foremost considerable arrangements of the Internet to
Commerce
appear.

Ecommerce allots customers to inductively interchange goods along with

benefits with no blockages of time or distance. Electronic commerce has
developed speedily over the ancient five years furthermore continues forecasted to
continue at this rate, or even advance. In the nearby future the limitations between
"customary" and "electronic" commerce will benefited incrementally hashed as
more and more businesses precede sections of their operations onto the Internet.

3.2 Advantages of E-commerce

Electronic commerce come into view in early 1990s, in addition increased
with rapid rate. Nowadays, the majority of companies have an online existence. In
detail, having the capability to carry out business all the way through the Internet
has become a need. Everything from food and clothes to entertainment and
furniture can be purchased online. E-Commerce advantages can be broadly
classified in three major categories:

 Advantages to Organizations

 Advantages to Consumers

 Advantages to Society

Advantages to Organizations

 With E-Commerce, organization grows their market until national as well as

international levels with low capital. They can find more consumers in less
time.

 With E-Commerce, organization will able to lower cost involved in

processing, distribution as well as handling paper information by digitizing
the information.

 E-commerce improves the brand image of the company.

 E-commerce helps organization to provide better customer services.

 E-Commerce helps to simplify the business processes and make them faster
and efficient.

 E-Commerce reduces paper work a lot.

38
 E-Commerce increased the productivity of the organization. Electronic
Commerce
Advantages to Customers

 Full 24x7 supports for Customer. E-commerce provides 24 hrs, 7 days

support for its product/services to customers for buying anytime from
anywhere.

 E-Commerce application provides user more options and quicker delivery of

products.

 E-Commerce application gives more options to customers to compare and

select better product in less price.

 Feedback regarding the product can be inserted by the customer for proper
valuation and review.

 E-Commerce provides option of virtual auctions.

 Readily available information to customer within seconds rather than

waiting for days or weeks.

 E-Commerce increases competition among the organizations and as result

organizations provides substantial discounts to customers.

Advantages to Society

 Customers need not to travel to shop a product thus less traffic on road and
low air pollution.

 E-Commerce helps reducing cost of products so less affluent people can also
afford the products.

 E-Commerce has enabled access to services and products to rural areas as

well which are otherwise not available to them.

 E-Commerce helps government to deliver public services like health care,

education, social services at reduced cost and in improved way.

39
Revolution and
Basics of E -
Check your progress 1
Commerce 1. How E-commerce can help consumers?
a. It provides user more options and quicker delivery of products.

b. It improves the brand image of the company

c. It helps organization to provide better customer services

d. It helps government to deliver public services

2. How E-commerce can help Society?

a. Online transaction reduces traffic on roads as consumers need not to go

outside

b. It helps government to deliver public services

c. helps reducing cost of products

d. All of these

3.3 Electronic Data Interchange

Electronic Data Interchange) continues as sharing of data from one
computer system to another through conventional message approximations, that
will not require human presence. EDI allow many establishments which can be in
different locations to transfer details through computer. Data gets transferred by
sequential links as well as with peer-to-peer networks, furthermore several
exchanges presently depends on Internet for connectivity.

Electronic Data Interchange (EDI) continues as electronic transfer of data or

information for business by applying normal format that can be a procedure that
will allow individual company to send information to other company through
internet instead of using paper. It is found that business entities will conduct
business through internet which is called as trading partners. It is found that
certain business document gets transferred with EDI, furthermore, two common
related being purchase orders and invoices. At its lowest, EDI alters mail
preparation along with handling of desired standard business communication.
Further, actual strength of EDI relies on standardized information which gets
transferred in business documents that can be possible without using paper.

40
 Electronic
Commerce

Fig 2.4 process of EDI

It is found that details of EDI carry string of data elements where every data
shows single details which lead to factors as price, product model number and so
on separated by delimiter. The complete sequence is called as data segment. One
or additional data segments surrounded by header as well as trailer form a
transaction set, which is the EDI component of transmission. A transaction set
over and over again consists of normally carries business document or form.
As soon as an EDI document sends, dual parties or trading partners gets
stick on to similar set of rules that are explained where besides how information
from document get obtained. Translation software processes the details differently
for sent as well as receive messages along with working complete audit of step to
make sure about information that is sent or received in EDI format. When the
translator on the receiving computer reads a document, it knows where to find the
buyer's company name, order number, purchase items and price, for example. This
information is then sent to the receiver's order entry system without necessitating
manual order entry.

41
Revolution and
Basics of E -
Check your progress 2
Commerce 1. EDI stands for___________.
a. Electronic Data Interchange

b. Email Data Internet

c. Ecommerce Digital Interchange

d. None of these
2. What is the use of EDI?

a. EDI permits multiple companies to exchange documents electronically

b. It allows to transfer data in standardized format

c. Both of these
d. None of these

3.4 Benefits of Electronic Data Interchange (EDI)

EDI was created to resolve difficulties intrinsic in paper-based operation
processing in addition to several other appearance of electronic communication. In
resolving certain problems, EDI serves as a tool which allows organizations to
restructure information flows along with business procedures. Difficulties with the
paper-based transferring system are:

Time delays:
Delays happen mainly due to paper documents time which needs days to
transport from one location to another. Additionally, manual processing delays are
due to key, file, retrieve as well as comparing of data.

Labor costs:
If a system is not with EDI, manual processing is needed for data keying,
storing and taking out of documents, sorting, matching, reconciling, envelope
stuffing, stamping, signing and much more. Further, automated tool will help with
certain procedures where many managers will agree on labor costs spends for
document processing showing major proportion of overhead. Generally, labor-
based processes are costly as compared to non-labor-intensive operations as it
makes use of computers and telecommunications.

42
Errors: Electronic
Commerce
Because information is keyed multiple times and documents are transported,
stored, and retrieved by people, non-EDI systems tend to be error prone.

Uncertainty:
Uncertainty appears in two domains. Initially paper transportation along
with several manual processing causes delay which is uncertain. After the
transaction, sender will not able to conclude about transaction position. Apart
from this, sender does not even know whether the transaction has been received at
all nor whether the receiver agrees with what was sent in the transaction.

High Inventories:
Inspite of long time interval and uncertainties in non EDI processing,
inventories are made higher as desired. In manufacturing, it is physically
impossible to have just-in-time inventory system having time delays inherency
that appears in non-EDI processing systems.

Information Access:
EDI allow user to work on large detailed transaction data in non-EDI
environment which is possible when large effort and time delay occurs. Since EDI
data is already in computer retrievable format, it is subject to automatic processing
and analysis.

Check your progress 3

1. What are the benefits of EDI?
a. Reduces time delay

b. Reduces errors
c. Ease in information access

d. All of these
2. How uncertainties can be occurring in paper work for exchanging
information?
a. Manual processing leads to delay in sending and receiving of documents

b. Absence of Feedback
c. Communication gap between sender and receiver

d. All of these

43
Revolution and 3.5 Electronic Commerce over the Internet
Basics of E -
Commerce Electronic commerce over the Internet is predicted to grow at an ever-
increasing rate over the next few years, with on-line sales already heading for
several billion. Many companies are using this new sales channel, and a few
retailers now have established major on-line sales sites. There have been some
successes, particularly in technology, business-to-business and niche markets.

Most companies with an Internet presence have a straightforward marketing

site. The objective of the site is to supplement traditional marketing activities,
perhaps give additional information, and generally promote the company. There is
often a reluctance to give complete product details because the objective is to
induce visitors to call or write to the company for more information and thus
establish contact.

A selling site is different. The objective is to close the sale electronically

with payment made over the Internet. This type of site will be designed to include
comprehensive product information, as visitors will be expected to make a
purchasing decision based on the information presented.

When the shopping session is complete, the customer clicks on a hyperlink

which takes him or her to the checkout page. At this stage the customer is
presented with a list of the goods marked for purchase, the total cost, shipping,
handling, tax, etc. The customer can then add shipping instructions, name, address
and so on.

Check your progress 4

1. What all products can be included for selling online?

a. Books
b. Clothing

c. Electronics
d. All of these

44
3.6 Internet Commerce Examples Electronic
Commerce
Internet shopping malls were set up early in the development of Internet
commerce having natural and common environment where many customers are
using a single Web site. Such advantages normally are not common. Malls work
in the real world as there is many scope for attraction of visitors with many
department stores functioning. After the customer or visitors arrived after parking
their vehicles with mood of shopping, it is convenient for them to buy at other
merchants having similar locality. This will not be in case of Internet. It is as easy
to visit another shop anywhere in the world as the „next‟ shop in a virtual mall.
People shopping for books are going to search for book sites. If they browse, it is
the list of matches to their requirements from a search engine, not an on-line
shopping mall.

Check your progress 5

1.Shopping in Malls involves:
a. Desk shopping

b. E-shopping
c. Order shopping

d. None of above

3.7 Let Us Sum Up

In this unit we have learnt that electronic commerce or ecommerce
continues a name for numerous category of business, or commercial exchange that
encompasses the exchange of information across the Internet. In this, we see that
electronic commerce come into existence in early 1990s, where addition increases
in large internet rate prevails. Presently companies have an online existence.

The Electronic Data Interchange continues as sharing of data from one

computer system to another through conventional message approximations that
will not require human presence. The working of EDI involves difficulties related
to intrinsic paper operation processing along with many other appearance of
electronic communication.

45
Revolution and 3.8 Answers for Check Your Progress
Basics of E -
Commerce
Check your progress 1

Answers: (1 -a), (2 –d)

Check your progress 2

Answers: (1 -a), (2 -c)

Check your progress 3

Answers: (1 –d), (2 –d)

Check your progress 4

Answers: (1 –d)

Check your progress 5

Answers: (1 –a)

3.9 Glossary
1. EDI - Electronic system on computers which involves in sharing of
information among themselves.
2. E-Mail - Messages that sends by computer networks from one person to
another or too many.

3. Electronic Commerce - It involves commercial transactions goods or

services through electronic media.

3.10 Assignment
Explain EDI in detail?

3.11 Activities
Find the disciplines where E-commerce can be used

46
3.12 Case Study Electronic
Commerce
Provide situations where applying E-commerce can be beneficial and also
where cannot?

3.13 Further Readings

1. Kenneth C. Laudon, Carol G. Traver (2008). E-Commerce: Business,
Technology, Society, Second Edition.
2. Jim Collins (2001). Good to Great: Why Some Companies Make the Leap...
and Others Don't.

47
Revolution and Block Summary
Basics of E -
Commerce In this block, you have learnt and understand about Electronic commerce or
ecommerce characteristics. The block gives an idea on features and functions of
Electronic Data Interchange. You have been well explained with EDI tools for an
organisation.
The block detailed about the origin of IPOs with features of dot-com. The
concept related to quantity versus quality in e-commerce is well detailed to the
students. You will be demonstrated practically about programmed input output
technique.

48
Block Assignment
Short Answer Questions
1. What is E- commerce?
2. What is Electronic data Interchange (EDI)?

3. Explain E-commerce era -II?

Long Answer Questions

1. Explain Technological intervention in E-commerce.
2. Write the advantages and disadvantages of using E-commerce in business?

3. Explain types of E-commerce in detail.

49
Revolution and Enrolment No.
Basics of E -
Commerce 1. How many hours did you need for studying the units?

Unit No 1 2 3 4

Nos of Hrs

2. Please give your reactions to the following items based on your reading of the
block:

3. Any Other Comments

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50
 Education is something
which ought to be
brought within
the reach of every one.

- Dr. B. R. Ambedkar

Dr. Babasaheb Ambedkar Open University

‘Jyotirmay Parisar’, Opp. Shri Balaji Temple, Sarkhej-Gandhinagar Highway, Chharodi,
Ahmedabad-382 481.