Submit to:

Adeel Khalid

Submitted by:

Haider Raza
 E-COMMERCE
Definition:

What is e-commerce?

The business done online including buying and selling of goods and sharing of data and information
over an electronic platform is called e-commerce.

The most common electronic platform used to do e-commerce is the internet.

e-commerce also has another term i.e. e-business which means we can carry out all the credit
transactions through electronic means and share all of our data, files and goods while sitting at home
with the help of the internet.

Mobile e-commerce (m-commerce):

The use of mobile devices such as phones, tablets etc. to carry out online sales transactions is called
mobile e-commerce or m-commerce. Mobile shopping, banking and payments are examples of m-
commerce.

Working:

How does e-commerce work though?

As stated above it is clear from the definition of e-commerce that it is highly powered by the internet.
The customers can access online shops and they can select and order goods through their own
electronic devices which includes phones, laptops, computers etc.

Now, when the customer places the order, the online site’s browser will communicate with the
customer thus carrying out e-commerce. The browser collects all the information from the customer
and scans through it all.

The payment is done through online transaction using online banking for example PayPal etc. After
fulfilling all these process there is an order management that sends the order requirements of the
customer to the warehouse to let them know when and which product to dispatch for the customer.
After the order is confirmed the customer is notified and informed that their order has been shipped.
Online marketplaces such as Amazon are included in hosting e-commerce transactions.

Government Regulations for E-Commerce

The existing e-commerce regulatory framework of Pakistan deals with general electronic transactions
including payment cards, internet banking, branchless banking Payment System Operators
(PSOs)/Payment System Providers (PSPs).

The Electronic Transaction Ordinance, 2002 (ETO, 2002) was the first legislation to recognize e-services
such as e-signatures, e-documents etc.

The Payment System and Electronic Fund Transfer Act 2007 (PSEFT 2007) was enacted for online
banking. This act was provided for Payment System Operators (PSOs) and Payment System Providers
(PSPs) to carry out online banking and transactions for e-commerce.

In 2016 the Pakistan Electronic Crimes Act (PECA 2016) defined and prescribed punishments for online
or e-business related crimes.

Together the ETO, PSEFT and PECA provide the basis of legal framework for e-commerce in Pakistan.

Though there is no set mechanism or registry set for e-commerce businesses in Pakistan however, the
Securities & Exchange Commission of Pakistan (SECP) proposes a simplified online registration of e-
commerce businesses and makes it mandatory for them to maintain a physical address in Pakistan.

Types of E-commerce:

1. Business to Business (B2B):

 Definition:
The electronic exchange of products, services or customers that is carried out between
two of more businesses is called B2B or Business to Business.
 This type of e-commerce is carried out directly between businesses rather than the
business and the customer for example a wholesaler and a retailer.
 Supply chain:
 B2B transactions are mostly carried out in supply chain where one company will
purchase raw materials from another business to use them in a manufacturing process.
 Example:
Its simple example can car parts that are brought separately from different companies
by one company to manufacture them all into one car.
 The B2B transactions are also common between housekeeping and industrial
companies.
Advantages:
 It increases the retailers brand recognition when its goods are promoted by the
wholesale company.
 In B2B e-commerce there is more sale rather than in Direct-to-consumer business. The
wholesale company buys more frequently and in more quantity than a single customer
does in one time.
 It reduces human error, improves sales and allows orders to be fulfilled faster.
2. Business to Consumer (B2C):
 Definition:
The retail part of the internet where the customers are sold goods/products by
companies and businesses is all business to consumer or B2C.
 It describes the transactions between online customers and their sellers/retailers.
 Rule over the internet:
In today’s time the B2C rules the internet as there are uncountable virtual stores on the
internet selling all types of consumer goods.
 Example:
The most popular and recognized example of B2C today is Amazon.
Advantages
 It provides an opportunity to even the smallest of businesses to reach customers all over
the world.
 B2C e-commerce help businesses to lower overhead costs by cutting the need to have a
physical shop that needs to be built or rented.
 Businesses can directly target their required audience using analytic tools on the
internet when they go online.
3. Customer-to-consumer (C2C):
  Definition:
The type of e-commerce where consumers trade products, services and information
with each other is called customer-to-consumer or C2C e-commerce.
 The transactions between these two parties are carried out by a third party which
provides them an online platform to carry out these transactions.
 Businesses that have the facility of C2C transactions help sellers reach a wide range of
customers.
 One thing to take care of in C2C e-commerce is that companies running C2C e-
commerce is that they need to maintain safe platforms and perform quality controls or
else buyers and sellers won’t use their products and services.
Advantages:
 A C2C e-commerce helps to connect the consumer with their target audience.
Example:
 Examples of C2C e-commerce are online auctions and classified advertisements.
 Sites like E-bay or Depop allow C2B2C (Consumer-to-Business-to-Consumer) and C2C
transactions respectively.
4. Customer-to-Business (C2B):
Definition:
 The type of e-commerce that allows consumers to sell their services or products to
companies or businesses which they can bid or purchase.
 This transaction is the opposite of B2C.
 It allows the consumer and business to have a mutually beneficial relationship.
 In this transaction the consumer creates a value for its own products and services to sell
to the companies.
Independent Workers:
 The C2B e-commerce includes independent workers who offer their services or products
on a website that promotes C2B e-commerce.
 They interact and negotiate with the business their own terms and conditions to work
with them.
 Advantage:
Advantage of C2B is that it provides flexibility, higher earning potential, wider reach and
independence.
5. Business-to-Administration:
 Definition:
The transactions carried out between businesses and public administrations or
government bodies is called business to administration e-commerce.
 There are many branches in government that depend on e-services or products which
include social security, legal documents, registers and employment.
 The popularity of B2A has increased vastly in recent years as there has been an increase
in the investments of e-government capabilities.
6. Consumer-to-Administration (C2A):
 Definition:
This transaction refers to transactions conducted online between consumer and public
administrations or government bodies.
 It is rare for the government to buy products or services from individuals however,
individuals frequently use electronic means to fulfill government requirements for
example, taxes, social security, health.

Advantages of E-Commerce

1. Availability:
The customers and web users can visit the e-commerce sites at any time as they are available
24/7.

2. Speed of Access:
While in a physical shop there can be crowds and a mess can be made, the e-commerce sites
have no such problem since its all online and all the pages are loaded within seconds.
Thus the whole shopping process on an e-commerce site takes less than 5 minutes while it can
take hours in a physical shop.

3. Wide Availability:
e-commerce sites have a wider availability of products than a physical shop does because they
manufacture all the products in a warehouse and then the product required by the customer is
shipped directly from the warehouse.

4. International Reach:
 Since the internet is accessed by people all over the world therefore e-commerce sites have
reach all over the world too. The e-commerce sites can sell their products/services to anyone
that’s sitting anywhere in the world through the medium of internet.

5. Lower Cost:
Having an e-commerce site reduces the costs of having a physical shop and paying its rent
however there will still be shipping and warehouse costs.

Disadvantages of E-Commerce

1. Limited Customer Service:

In an e-commerce store the customer service is limited as compared to a physical store because
in a physical store the customer has workers around it to ask for help or recommendations
however this service is quite limited on e-commerce sites.

2. Limited Product Experience:

When the customer buys a product from a physical store the customer has full trust in the
product because the customer has seen and felt the quality of the product physically. E-
commerce sites are unable to provide this service as it is all online and the customer has to put
blind trust on the e-commerce site while buying a product from it for the first time.

3. Wait Time:
In a physical store the customers buy the product instantaneously and go home with it but when
customers order from e-commerce sites they have to wait for the product to be shipped to
them.

4. Security:
Even though e-commerce sites have many advantages there are still expert hackers sitting on
the internet who make authentic looking websites and steal customer’s personal information.
Thus, security is the greatest disadvantage of e-commerce.

E-Commerce Applications
1. Retail and Wholesale
2. Online Marketing
 3. Finance
4. Online Booking
5. Manufacturing
6. Online Publishing
7. Digital Advertising
8. Auctions

E-Commerce Platforms and Vendors

E-commerce platform is a tool to manage e-commerce business. The sizes of these platform ranges from
small to large enterprises.

Some examples of e-commerce marketplace platforms include:

1. Alibaba
2. Amazon
3. Ebay
4. Etsy
5. Rakuten
6. Walmart Marketplace

Some examples of the vendors that provide platform to e-commerce businesses are:

1. BigCommerce
2. Magento
3. Shopify
4. Squarespace

Conclusion

From all the above discussed points we conclude that even though the world has progressed far in
e-commerce and accepting the open use of internet out country is still way behind. Pakistan needs
to accept the fact that now living a normal life without the internet is impossible and especially
maintaining a business without online services. E-commerce needs to become more common in our
country and fast. Without common use of e-commerce our country cannot progress further in the
line of businesses and cannot compete with other countries.

THE END

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