E-Commerce

Saturday, August 22, 2020 9:04 AM

E-commerce stands for Electronic Commerce, which implies the process of carrying out trading activities
through electronic devices and tools such as computer, mobile, tablets and other inter-connected
telecommunication networks. Here the transaction between the buyer and seller is made electronically
and so the physical interaction between the parties is absent. The basic requirement is a website with
the help of which the transaction can be made. Thus, E-commerce includes:

• Online shopping
• Online ticket booking
• Online banking
• Online hotel booking
• Social networking* etc.

E-commerce includes the monitory transaction and trading of goods and services over the internet
through electronic devices. The entire business organization may be running in offline mode however
the trading and transactions occur online. E-commerce requires internet to connect the company with
rest of the world. Not all company activities are conducted online except trading and transactions.

Electronic commerce (e-commerce) remains a relatively new, emerging and constantly changing area of
business management and information technology. E-commerce is digitally enabled commercial
transactions between and among organizations and individuals. Digitally enabled transactions include all
transactions mediated by digital technology e.g. Internet. For the most part, this means transactions
that occur over the Internet and the Web. Commercial transactions involve the exchange of value (e.g.,
money) across organizational or individual boundaries in
return for products and services. Exchange of value is important for understanding the limits of e-
commerce. Without an exchange of value, no commerce occurs.

Some of the definitions of e-commerce often heard and found in publications and the media are:

• E-commerce is where business transactions take place via telecommunications networks,

especially the Internet.
• Electronic commerce describes the buying and selling of products, services, and information via
computer networks including the Internet.
• Electronic commerce is about doing business electronically.
• E-commerce is defined as the conduct of a financial transaction by electronic means.

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E-Business
Saturday, August 22, 2020 9:58 AM

E-business expands to Electronic Business, which implies the online presence of the business
firm/merchant. It includes e-commerce and other business activities. It is not restricted to
interaction between customers and suppliers only. Indeed it includes the interaction between
different departments and employee within the organization. Hence, it includes e-commerce
and other business activities such as |Accounting, Finance, Human Resource, Production etc.
which are conducted electronically.

E-business may be of two types

• Pure Play
• Brick and Click

Pure play is the form of e-business where the entire business is completely relying on e-business. The
organization operates only in virtual environment (only in online mode). Whereas Brick-and-click is the
form of e-business where business is operating in both physical as well as virtual environment (that is,
online and offline modes).

E-business is comparatively a broader term than e-commerce. In e-business, trading of goods and
services and monitory transactions are not enough to be conducted online, it also involves
administrative and managerial activities as well. E-commerce can be conducted with the help of a
website or mobile application, however, e-business requires some additional systems such as CRM
(Customer Relationship Management), ERP (Enterprise Resource Planning) systems etc. For e-
commerce to be functional, it is sufficient to connect the company over internet however in e-business,
internet, intranet and extranet are appropriately maintained. E-commerce is completely extroverted
whereas e-business is ambiverted, meaning it has to keep both internal and functional units online. E-
commerce is a part of e-business.

For example, let us imagine school 'A' and school 'B'. Imagine that school 'A' is a physical school that has
a website in which it provides some information and also provides the facility of online bill payment
however all teaching and learning activities are in physical school only. On the other hand, school 'B'
provides every services online including student admission, entrance examination, virtual classes, result
system etc. Here we can clearly say that school 'A' has e-commerce whereas school 'B' has e-business.

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Benefits of E-commerce
Tuesday, August 25, 2020 3:55 PM

The benefits of e-commerce can be seen to affect three major stakeholders: organizations, consumers and society.

1. Benefits of e-commerce to organizations:

a. International marketplace:
What used to be a single physical marketplace located in a geographical area has now become a borderless marketplace including national and
international markets. By becoming e-commerce enabled, businesses now have access to people all around the world.

b. Operational cost saving:

The cost of creating, processing, distributing, storing and retrieving paper-based information has decreased.

c. Mass customization:
E-commerce has revolutionized the way consumers buy goods and services. Customers can easily search for the product of their choice. Even they
can customize the product according to their specific requirement. In physical market, customer has to search for the product and know about its
specifications. However, due to e-commerce, it is possible to search products according to specifications.

d. Enables reduced inventories:

It is possible to collect the customer order and then delivering through JIT (just-in-time) manufacturing. This is particularly beneficial for
companies in the high technology sector, where stocks of components held could quickly become obsolete within months. For example,
companies like Motorola (mobile phones), and Dell (computers) gather customer orders for a product, transmit them electronically to the
manufacturing plant where they are manufactured according to the customer’s specifications (like colour and features) and then sent to the
customer within a few days.

e. Lower telecommunications cost:

The Internet is much cheaper than value added networks (VANs) which were based on leasing telephone lines for the sole use of the organisation
and its authorized partners. It is also cheaper to send a fax or e-mail via the Internet than direct dialing.

f. Digitization of products and processes: Particularly in the case of software and music/video products, which can be downloaded or e-mailed
directly to customers via the Internet in digital or electronic format.

g. No more time constraint:

Businesses can be contacted by or contact customers or suppliers at any time.

2. Benefits of e-commerce to consumers:

a. 24/7 access:
Enables customers to shop or conduct other transactions 24 hours a day, all year round from almost any location. For example, checking balances,
making payments, obtaining travel and other information.

b. More Choices:
Customers not only have a whole range of products that they can choose from and customise, but also an international selection of suppliers.

c. Price Comparison:
Customers can ‘shop’ around the world and conduct comparisons either directly by visiting different sites. (for example www.moneyextra.co.uk
for financial products and services).

d. Improved delivery processes:

This can range from the immediate delivery of digitized or electronic goods such as software or audio-visual files by downloading via the Internet,
to the on-line tracking of the progress of packages being delivered by mail or courier.

e. Continuous support system:

After the product delivery, customers can remain in touch with the merchant. The merchant can track the product performance. User can get
regular support and give feedback about the product or service.

f. An environment of competition:
Substantial discounts can be found or value added, as different retailers for customers.

3. Benefits of e-commerce to the society:

a. Enables more flexible working practices:

Which enhances the quality of life for a whole host of people in society, enabling them to work from home. It also potentially reduces
environmental pollution as fewer people have to travel to work regularly.

b. Connects people:

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b. Connects people:
Enables people in developing countries and rural areas to enjoy and access products, services, information and other people which otherwise
would not be so easily available to them.

c. Facilitates delivery of public services:

For example, health services available over the Internet (on-line consultation with doctors or nurses), filing taxes over the Internet through the
Inland Revenue website.

Unit-1 Introduction Page 4

Limitations of e-commerce
Tuesday, August 25, 2020 4:27 PM

These again will be dealt with according to the three major stakeholders – organizations, consumers and society.

1. Limitations of e-commerce to organizations:

a. Lack of sufficient system security, reliability, standards and communication protocols:

There are numerous reports of websites and databases being hacked into, and security holes in software. For example, Microsof t has over the years issued many
security notices and ‘patches’ for their software. Several banking and other business websites, have experienced breaches in security where ‘a technical oversight’ or
‘a fault in its systems’ led to confidential client information becoming available to all.

b. Rapidly evolving and changing technology:

There is always a feeling of trying to ‘catch up’ and not be left behind. On this regards, organization has to pay huge cost to continuously upgrade the system and
tools.

c. Under pressure to innovate:

Organization remains under pressure to innovate and develop business models to exploit the new opportunities which sometimes leads to strategies detrimental to
the organization. The ease with which business models can be copied and emulated over the Internet increase that pressure and curtail longer-term competitive
advantage.

d. International Competition:
Organization are facing increased competition from both national and international competitors often leads to price wars and subsequent unsustainable losses for
the organization.

e. Problems with compatibility of older and ‘newer’ technology:

There are problems where older business systems cannot communicate with web based and Internet infrastructures, leading to so me organizations running almost
two independent systems where data cannot be shared. This often leads to having to invest in new systems or an infrastructure , which bridges the different systems.
In both cases this is both financially costly as well as disruptive to the efficient running of organizations.

2. Limitations of e-commerce to customers:

a. Cost:
Computing equipment is needed for individuals to participate in the new ‘digital’ economy, which means an initial capital cost to customers. Also the customer has
to bear cost of access to the Internet, whether dial-up or broadband tariffs.

b. Technical Skill:
A basic technical knowledge is required of both computing equipment and navigation of the Internet and the World Wide Web.

c. Continuously changing technology:

Not just the initial cost of buying equipment but making sure that the technology is updated regularly to be compatible with the changing requirement of the
Internet, websites and applications.

d. Lack of security and privacy of personal data:

There is no real control of data that is collected over the Web or Internet. Data protection laws are not universal and so websites hosted in different countries may
or may not have laws which protect privacy of personal data.

e. Lack of personal touch:

Physical contact and relationships are replaced by electronic processes. Customers are unable to touch and feel goods being s old on-line or gauge voices and
reactions of human beings.

f. Lack of trust:
There may be the lack of trust because consumers are interacting with faceless computers.

3. Limitations of e-commerce to society:

a. Breakdown in human interaction:

As people become more used to interacting electronically there could be an erosion(divide) of personal and social skills which might eventually be detrimental
to the world we live in where people are more comfortable interacting with a screen than face to face.

b. Social division:
There is a potential danger that there will be an increase in the social divide between technical haves and have-nots – so people who do not have technical skills
become unable to secure better-paid jobs and could form an underclass with potentially dangerous implications for social stability.

c. Technological dependency:
In case of power failure due to natural or accidental situations, the entire commercial activities may be affected.

d. Environmental problem:
As the entire market is dependent on computing devices, there may be a huge environmental issue caused by the technological w aste.

e. Lack of stock:
Just-in-time manufacturing could potentially cripple an economy in times of crisis as stocks are kept to a minimum and delivery patterns are based on pre-set levels
of stock which last for days rather than weeks .

f. Social norms:

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f. Social norms:
Due to the ease of starting any business, one can sell socially restricted contents over the internet. For example the porn sites that may attract the children and
increase abuses.

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Features of E-Commerce
Saturday, August 22, 2020 9:58 AM

Following figure illustrates eight unique features of c-commerce technology that both challenge traditional business thinking and explain why we have so much interest in
e-commerce. These unique dimensions of e-commerce technologies suggest many new possibilities for marketing and selling a powerful set of interactive, personalized,
and rich messages are available for delivery to segmented, targeted audiences.

E-commerce technologies make it possible for merchants to know much more about consumers and to be able to use this informationmore effectively than was ever true
in the past. Online merchants can use this new information to develop new information asymmetries, enhance their ability to brand products, charge premium prices for
high-quality service, and segment the market into an endless number of subgroups, each receiving a different price. We can list out the major features of e-commerce as:

1. Ubiquity:
2. Global Reach:
3. Universal Standards:
4. Social Technology:
5. Personalization and Customization:
6. Information Density:
7. Interactivity:
8. Richness:

Each of the features of e-commerce technology illustrated in above list, deserves a brief exploration, as well as a comparison to both traditional commerce and other forms
of technology-enabled commerce.

1. Ubiquity (Appearing Everywhere): In traditional commerce, a marketplace is a physical place you visit in order to transact. For example, television and radio typically
motivate the consumer to go someplace to make a purchase. E-commerce, in contrast, is characterized by its ubiquity: it is available just about everywhere, at all
times. It liberates the market from being restricted to a physical space and makes it possible to shop from your desktop, at home, at work, or even from your car,
using mobile e-commerce. A technical term "marketspace" is used for such mobile market place. In other words, marketspace is the marketplace extended beyond
physical boundaries of geographical location. The time and money needed to travel in the market is saved. At a broader level, the ubiquity of e-commerce lowers the
cognitive energy required to transact in a marketplace. Cognitive energy refers to the mental effort required to complete a t ask.

2. Global Reach: E-commerce technology permits commercial transactions to cross cultural, regional, and national boundaries far more convenientl y and cost-
effectively than is true in traditional commerce. As a result, the potential market size for e -commerce merchants is roughly equal to the size of the world's online
population. More realistically, the Internet makes it much easier for start -up online merchants within a single country to achieve a national audience than was ever
possible in the past. The total number of users or customers an e -commerce business can obtain is a measure of its reach. In contrast, most traditional commerce is
local or regional it involves local merchants or national merchants with local outlets. Television and radio stations, and ne wspapers, for instance, are primarily local
and regional institutions with limited but powerful national networks that can attract a national audience. In contrast to c -commerce technology, these older
commerce technologies do not easily cross national boundaries to a global audience.

3. Universal Standards: One strikingly unusual feature of c-commerce technologies is that the technical standards of the Internet, and therefore the technical standards
for conducting c-commerce, arc universal standards—they are shared by all nations around the world. In contrast, most traditional commerce technologies differ
from one nation to the next. The universal technical standards of the Internet and e -commerce greatly lower market entry costs—the cost merchants must pay just
to bring their goods to market. At the same time, for consumers, universal standards reduce search costs — the effort required to find suitable products. And by
creating a single, one-world marketspace, where prices and product descriptions can be inexpensively displayed for all to sec, price discovery becom es simpler,
faster, and more accurate. With e-commerce technologies, it is possible for the first time in history to easily find many of the suppliers, prices, and deliver y terms of a
specific product anywhere in the world, and to view them in a coherent, comparative environment. Although this is not necessa rily realistic today for all or even
many products, it is a potential that will be exploited in the future.

4. Social Technologies: In a way quite different from all previous technologies, e-commerce technologies have evolved to be much more social by allowing users to
create and share content with a worldwide community. Using these forms of communication, users are able to create new social networks and strengthen existing
ones. All previous mass media in modern history, including the printing press, use a broadcast model (one -to-many) where content is created in a central location by
experts (professional writers, editors, directors, actors, and producers) and audiences are concentrated in huge aggregates t o consume a standardized product. The
telephone would appear to be an exception but it is not a "mass communication'' technology. Instead the telephone is a one -to-one technology. The Internet and e-
commerce technologies have the potential to invert this standard media model by giving users the power to create and distribu te content on a large scale, and

Unit-1 Introduction Page 7

 commerce technologies have the potential to invert this standard media model by giving users the power to create and distribu te content on a large scale, and
permit users to program their own content consumption. The Internet provides a unique, many -to-many model of mass communication.

5. Personalization and Customization: E-commerce technologies permit personalization. Merchants can target their marketing messages to specific individuals by
adjusting the message to a person's name, interests, and past purchases. Today this is achieved in a few milliseconds and fol lowed by an advertisement based on the
consumer's profile.

The technology also permits customization. Changing the delivered product or service based on a user's preferences or prior b ehavior. Given the interactive nature of
e-commerce technology, much information about the consumer can be gathered in the marketplace at the moment of purchase. With t he increase in information
density, a great deal of information about the consumer's past purchases and behavior can be stored and used by online mercha nts. The result is a level of
personalization and customization unthinkable with traditional commerce technologies.

For instance, you may be able to shape what you see on television by selecting a channel, but you cannot change the contents of the channel you have chosen. In
contrast, the online version of the Financial Times allows you to select the type of news stories you want to sec first, and gives you the opportunity to be alerted
when certain events happen. Personalization and customization allow firms to precisely identify market segments and adjust th eir messages accordingly.

6. Information Density & Transparency: E-commerce technologies vastly increase information density —the total amount and quality information available to all
market participants, consumers, and merchants alike. E-commerce technologies reduce information collection, storage, processing, and communication costs. At the
same time, these technologies greatly increase the currency, accuracy, and timeliness of information —making information more useful and important than ever. As a
result, information becomes more plentiful, less expensive, and of higher quality. A number of business consequences result f rom the growth in information density.
In e-commerce markets, prices and costs become more transparent. Price transparency refers to the case with which consumers can fi nd out the variety of prices in a
market; cost transparency refers to the ability of consumers to discover the actual costs merchants pay for products. But the re arc advantages for merchants as well.
Online merchants can discover much more about consumers; this allows merchants to segment the market into groups willing to p ay different prices and permits
them to engage in price discrimination—selling the same goods, or nearly the same goods, to different targeted groups at different prices.

For instance, an online merchant can discover a consumer's avid interest in expensive exotic vacations, and then pitch expens ive exotic vacation plans to that
consumer at a premium price, knowing this person is willing to pay extra for such a vacation. At the same time, the online me rchant can pitch the same vacation plan
at a lower price to more price sensitive consumers. Merchants also have enhanced abilities to differentiate their products in terms of cost, brand, and quality.

7. Interactivity: Unlike any of the commercial technologies of the twentieth century, with the possible exception of the telephone, e -commerce technologies allow for
interactivity, meaning they enable two-way communication between merchant and consumer and among consumers. Traditional television, for instance, cannot ask
viewers questions or enter into conversations with them, or request that customer information be entered into a form. In cont rast, all of these activities are possible
on an e-commerce site and are now commonplace with smart phones, social networks, and Twitter. Interactivity allows an online merchan t to engage a consumer in
ways similar to a face-to-face experience.

8. Richness: Information richness refers to the complexity and content of a message (Evans and Wurster, 1999). Traditional markets, nationa l sales forces, and small
retail stores have great richness: they are able to provide personal, face -to-face service using aural and visual cues when making a sale. The richness of traditional
markets makes them a powerful selling or commercial environment. Prior to the development of the Web, there was a trade -off between richness and reach: the
larger the audience reached, the less rich the message. The Internet has the potential for offering considerably more informa tion richness than traditional media such
as printing presses, radio, and television because it is interactive and can adjust the message to individual users. Chatting with an online sales person, for instance,
comes very close to the customer experience in a small retail shop. The richness enabled by the Internet allows retail and se rvice merchants to market and sell
"complex" goods and services that heretofore required a face-to-face presentation by a sales force to a much larger audience.

The features of e-commerce and their significance are tabulated in the following table:

E-commerce feature Significance

Ubiquity—Internet/Web technology is available everywhere: The marketplace is extended beyond traditional boundaries and
at work, at home, and elsewhere via mobile devices, anytime. is removed from a temporal and geographic location.
"Marketspace" is created; shopping can take place anywhere.
Customer convenience is enhanced, and shopping costs are
reduced.
Global reach—The technology reaches across national Commerce is enabled across cultural and national boundaries
boundaries, around the earth. seamlessly and without modification. "Marketspace" includes
potentially billions of consumers and millions of businesses
worldwide.
Universal standards—There is one set of technology There is a common, inexpensive, global technology foundation
standards, namely Internet standards. for businesses to use.
Social technology—User content generation and social New Internet social and business models enable user content
networks. creation and distribution, and support social networks.
Personalization/Customization—The technology allows Personalization of marketing messages and customization of
personalized messages to be delivered to individuals as well as products and services are based on individual characteristics.
groups.
Information density & transparency—The technology reduces Information processing, storage, and communication costs drop
information costs and raises quality and transparency. dramatically, while currency, accuracy, and timeliness improve
greatly. Information becomes plentiful, cheap, and accurate.
Interactivity—The technology works through interaction with Consumers are engaged in a dialog that dynamically adjusts the
the user. experience to the individual, and makes the consumer a
coparticipant in the process of delivering goods to the market.
Richness—Video, audio, and text messages are possible. Video, audio, and text marketing messages are integrated into a
single marketing message and consuming experience.

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 single marketing message and consuming experience.

Unit-1 Introduction Page 9

Pure Vs Partial E-Commerce
Saturday, August 22, 2020 9:58 AM

In the traditional commerce, the entire transaction including searching of product, payment and delivery is done physically. Based on whether the
transactions are completely digitalized or not, e-commerce can be divided into pure e-commerce and partial e-commerce.

1. Pure e-commerce:
An e-commerce service is said to be pure e-commerce if all the transactions including product searching, payment, delivery and support are
conducted online. For an e-commerce to be pure, the product and processes must be digitalized. That means, in e-commerce, all the
dimensions are digital. For example buying music on iTunes, movies on NetFlix, antivirus purchasing, mobile banking etc.

In pure e-commerce, product, services and other business processes are highly digitalized.

2. Partial e-commerce:
An e-commerce service is said to be partial if it involves both physical and digital dimensions. Most of the e-commerce merchants that shell
physical products online are of this nature. For example daraz is an e-commerce merchant that executes all of its dimensions online except
product delivery.

In partial e-commerce, the business processes are highly digitalized probably except the product delivery.

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History of E-Commerce
Saturday, August 22, 2020 9:58 AM

Although e-commerce is not very old, it already has a tumultuous history. The history of e-commerce can be usefully divided into
three periods:

1. 1995-2000, the period of invention

2. 2001-2006, the period of consolidation
3. 2007-prcscnt, a period of reinvention with social, mobile, and local expansion

E-COMMERCE 1995-2000: INVENTION

The early years of e-commerce were a period of explosive growth and extraordinary innovation, beginning in 1995 with the first
widespread use of the Web to advertise products. During this Invention period, e-commerce meant selling retail goods, usually quite
simple goods, on the Internet. There simply was not enough bandwidth for more complex products. Marketing was limited to
unsophisticated static display ads and not very powerful search engines. The Web policy of most large firms, if they had one at all,
was to have a basic static Web site depicting their brands.

The rapid growth in e-commerce was fueled by over SI25 billion in venture capital in the United States. This period of e -commerce
came to a close in 2000 when stock market valuations in the United States plunged, with thousands of companies disappearing(t he
"dot-com bubble burst").

The early years of c-commerce were also one of the most euphoric of times in global commercial history. It was also a time when
key e-commerce concepts were developed. For computer scientists and information technologists, the early success of c -commerce
was a powerful vindication of a set of information technologies that had developed over a period of 40 years —extending from the
development of the early Internet, to the PC, to local area networks.

Technologists celebrated the fact that the Internet was not controlled by anyone or any nation, but was free to all. They bel ieved
the Internet— and the c-commerce that rose on this infrastructure—should remain a self-governed, self-regulated environment.

For economists, the early years of c-commerce raised the realistic prospect of a nearly perfect competitive market: where price,
cost, and quality information are equally distributed, a nearly infinite set of suppliers compete against one another, and c ustomers
have access to all relevant market information worldwide. Merchants in turn would have equal direct access to hundreds of mil lions
of customers. Transaction costs would plummet because search costs— the cost of searching for prices, product descriptions,
payment settlement, and order fulfillment—would all fall drastically. For merchants, the cost of searching for customers would also
fall, reducing the need for wasteful advertising. At the same time, advertisements could be personalized to the needs of ever y
customer. Prices and even costs would be increasingly transparent to the consumer, who could now know exactly and instantly t he
worldwide best price, quality, and availability of most products. Information asymmetry would be greatly reduced. Given the i nstant
nature of Internet communications, the availability of powerful sales information systems, and the low cost involved in chang ing

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nature of Internet communications, the availability of powerful sales information systems, and the low cost involved in chang ing
prices on a Web site (low menu costs), producers could dynamically price their products to reflect actual demand, ending the idea of
one national price, or one suggested manufacturer's list price. In turn, market middlemen —the distributors and wholesalers who arc
intermediaries between producers and consumers, each demanding a payment and raising costs while adding little value —would
disappear (disintermediation). Manufacturers and content originators would develop direct market relationships with their
customers. The resulting intense competition, the decline of intermediaries, and the lower transaction costs would eliminate
product brands, and along with it, the possibility of monopoly profits based on brands, geography, or special access to facto rs of
production. E-commerce was evolving as friction-free commerce.

For real-world entrepreneurs, their financial backers, and marketing professionals, e-commerce represented an extraordinary
opportunity to earn far above normal returns on investment. The e-commerce marketspace represented access to millions of
consumers worldwide who used the Internet and a set of marketing communications technologies (e -mail and Web pages) that was
universal, inexpensive, and powerful. In this new marketspace, extraordinary profits would go to first movers —those firms who
were first to market in a particular area and who moved quickly to gather market share. customers became accustomed to using a
company's unique Web interface and feature set, they could not easily be switched to competitors.

The number of visitors to a site ("eyeballs"), and gross revenue became far more important in the earlier stages of an online firm
than earnings or profits. Entrepreneurs and their financial backers in the early years of e-commerce expected that extraordinary
profitability would come, but only after several years of losses. traditional corporations were too slow and bureaucratic.

Overall, this period of e-commerce was characterized by experimentation, capitalization, and hyper competition.

E-COMMERCE 2001-2006: CONSOLIDATION

In the second period of e-commerce, from 2000 to 2006, a sobering period of reassessment of e-commerce occurred, with many
critics doubting its long-term prospects. Emphasis shifted to a more "business-driven" approach rather than being technology
driven; large traditional firms learned how to use the Web to strengthen their market positions; brand extension and strength ening
became more important than creating new brands. During this period of consolidation, e -commerce changed to include not just
retail products but also more complex services such as travel and financial services. This period was enabled by widespread
adoption of broadband networks in American homes and businesses, coupled with the growing power and lower prices of personal
computers that were the primary means of accessing the Internet, usually from work or home.

The Web policy of both large and small firms expanded to include a broader 'Web presence" that included not just Web sites, b ut
also e-mail, display, and search engine campaigns; multiple Web sites for each product; and the building of some limited community
feedback facilities. E-commerce in this period was growing again by more than 10% a year.

E-COMMERCE 2007-PRESENT: REINVENTION

Beginning in2007 with the introduction of the iPhone, to the present day, e-commerce has been transformed yet again by the rapid
growth of online social networks, widespread adoption of consumer mobile devices such as smart phones and tablet computers,
and the expansion of e-commerce to include local goods and services. The defining characteristics of this period are often
characterized as the "social, mobile, local" online world. In this period, entertainment content begins to develop as a major source
of e-commerce revenues and mobile devices become entertainment centers, as well as on-the-go shopping devices for retail goods
and services. Marketing is transformed by the increasing use of social networks, word-of-mouth, viral marketing, and much more
powerful data repositories and analytic tools for truly personal marketing. Firms' online policies expand in the attempt to b uild a
digital presence that surrounds the online consumer with coordinated marketing messages based on their social network
memberships, use of search engines and Web browsers, and even their personal e-mail messages, social networks, the mobile
platform, and local commerce. This period is as much a sociological phenomenon as it is a technological or business phenomeno n.

Following table summarizes the evolution of e-commerce during three phases:

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Unit-1 Introduction Page 13
E-Commerce Framework (5 pillars of e-commerce)
Saturday, August 22, 2020 9:59 AM

E-commerce framework is composed of five pillars as listed below.

1. People
2. Public Policy
3. Marketing & Advertisement
4. Support Services
5. Business partnership

People: They are the direct or indirect user of e-commerce. They may be playing their role in merchant side
or costumer side or intermediaries. System specialist and employees also belong to the member of this pillar.

Public Policy: The legal issues of government and regulating strategy of the e-commerce merchant form a
second pillar of e-commerce. Government legal issues include taxation laws, privacy act etc. and the
merchant's issues like terms and conditions, copyrights, trademarks etc. are the major rods of this pillar.

Marketing & Advertisement: In the latest time, web presence of an e-commerce vendor is the major
strategy. This includes the strategy to attract the users by using social media through customized
advertisements. This is supported by market research, promotions, content marketing, digital advertising,
influencer engagement etc.

Support Services: One of the major pillar of an e-commerce is support service. It is the additional service that
keeps the e-commerce running. This may include after sales support, payment gateway services, logistic
services, content services etc.

Business Partnership: Mutually beneficial business relationships that can support e-commerce is another
strong asset these days. This may include affiliate programs, joint venture, e-marketplace etc.

Unit-1 Introduction Page 14

Types of E-Commerce
Saturday, August 22, 2020 10:01 AM

There are several different types of e-commerce and many different ways to characterize them. For the most
part, we distinguish different types of e-commerce by the nature of the market relationship—who is selling
to whom. Social, mobile, and local e-commerce can be looked at as subsets of these types of e-commerce.

The major types of e-commerce include:

1. Business-to-Consumer e-commerce (B2C)
2. Business-to-Business e-commerce (B2B)
3. Consumer-to-Consumer e-commerce (C2C)
4. Consumer-to-Business e-commerce (C2B)

Business-to-Consumer e-commerce (B2C): The most commonly discussed type of e-commerce is business-
to-consumer (B2C) e-commerce, in which online businesses attempt to reach individual consumers. B2C
commerce includes purchases of retail goods, travel services, and online content. B2C e-commerce has
grown exponentially since 1995, and is the type of e-commerce that most consumers are likely to encounter.
There are different models of B2C e-commerce models such as: portals, online retailers, content providers,
transaction brokers, market creators, service providers, and community providers. For example, When a
good or service is sold to an individual consumer by a business, e.g., we buy a pair of shoes from an online
retailer.

Business-to-Business e-commerce (B2B): Business-to-Business (B2B) e-commerce, in which businesses focus

on selling to other businesses, is the largest form of e-commerce. B2B e-commerce has significant growth
potential. The ultimate size of B2B e-commerce is potentially huge. There are two primary business models
used within the B2B arena: Net marketplaces, which include e-distributors, e-procurement companies,
exchanges and industry consortia, and private industrial networks. For example, When a good or service is
sold by a business to another business, e.g., a software-as-a-service is sold by a business for other businesses
to use.

Consumer-to-Consumer e-commerce (C2C): Consumer-to-consumer (C2C) e-commerce provides a way for

consumers to sell to each other, with the help of an online market maker such as eBay. In C2C e-commerce,
the consumer prepares the product for market, places the product for auction or sale, and relics on the
market maker to provide catalog, search engine, and transaction-clearing capabilities so that products can be
easily displayed, discovered, and paid for by another consumer. For example, When a good or service is sold
by a consumer to another consumer, e.g., we sell our old furniture on eBay to another consumer.

Consumer-to-Business e-commerce (C2B): Consumer-to-Business (C2B) e-commerce model is the least used
one, however at present, it is increasing exponentially. In this model, an individual can sell products or
services to the merchants. For example, different freelancing sites, photograph selling sites etc.

The other types of e-commerce are:

• M-Commerce
• U-Commerce
• Social E-Commerce
• Local E-Commerce

Mobile E-Commerce or M-Commerce: Mobile e-commerce, or m-commerce, refers to the use of mobile
devices to enable online transactions. m-commerce involves the use of cellular and wireless networks to
connect laptops, smart phones such as the iPhone, Android, and BlackBerry, and tablet computers such as
the iPad to the Internet. Once connected, mobile consumers can conduct transactions, including stock
trades, in-store price comparisons, banking, travel reservations, and more. Due to the advancement in
smartphone technology, the users are geometrically increasing in smart phone technology. Thus, e-

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smartphone technology, the users are geometrically increasing in smart phone technology. Thus, e-
commerce is largely focusing on mobile devices giving rise to a new type of e-commerce called as m-
commerce.

Social E-Commerce: Social e-commerce is e-commerce that is enabled by social networks and online social
relationships. It is sometimes also referred to as Facebook commerce, but in actuality is a much larger
phenomenon that extends beyond just Facebook. The growth of social e-commerce is being driven by a
number of factors, including the increasing popularity of social sign-on (signing on to Web sites using your
Facebook or other social network ID), network notification(the sharing of approval or disapproval of
products, services, and content via Facebook's Like button or Twitter tweets), online collaborative shopping
tools, and social search (recommendations from online trusted friends).

Local E-Commerce: Local e-commerce, as its name suggests, is a form of e-commerce that is focused on
engaging the consumer based on his or her current geographic location. Local merchants use a variety of
online marketing techniques to drive consumers to their stores. Local e-commerce is the third prong of the
social, mobile, local e-commerce wave, and is expected to grow rapidly.

U-Commerce: Ubiquitous Commerce also known as U-Commerce, refers to a variety of goods and/or
services. Sometimes, it is used to refer to the wireless, continuous communication and exchange of data and
information between and among retailers, customers, and systems regardless of location, devices used, or
time of day. Ubiquitous Commerce, Universal Commerce or Ultimate Commerce (ubiquitous meaning ever-
present), depending on whom you ask. It describes the concept that buyers and sellers have the potential to
interact anywhere, anytime thanks to the use of wireless devices, such as cell phones, by buyers to connect
with sellers via the Internet where orders can be placed online and payments can be made via credit card or
PayPal. The Association for Information Systems states that the qualities of U-Commerce include ubiquity,
uniqueness, universality and unison.

• Ubiquitous = represents the ability to be connect at any time and in any place as well as the integration
of human-computer interaction into most devices and processes, e.g. household objects.

• Uniqueness = stands for the unique identification of each customer or user regarding his identity,
current context, needs and location resulting in an individual service

• Universal = is related to everyone’s devices which can be used multifunctional and as well as
universal –you will always be connected no matter of your place.

• Unison = constitutes the data integration across applications and devices to provide users consistent
and fully access to required information independent of device and location. The term unison also
relates to fully synchronized devices at any time.

U-Commerce is described as the evolution of E-Commerce and M-Commerce.

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Challenges in E-commerce
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1. Online Identity Verification Problem: People may enter wrong information.

2. Competitor Analysis: Many vendors offering same product. You must know market.
3. Maintaining Customer Loyalty: Keep existing customer and add new.
4. Product Refund and Refund Policy:
5. Shipping Cost:
6. Retailers and Manufacturer Selling Same Product: D2C retailers are biggest competitors.
7. Data Security:
8. Profound Online Presence:
9. Trust
10. Switching to M-Commerce and IOT-Commerce

Explain in your own words.

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Status of E-commerce in Nepal
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Add your assignment

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Overview of Electronic Transaction Act of Nepal
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Major Points:

(See all from this chapter)

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