Summarize E-Commerce

Chapter 2, E-Commerce: Mechanisms, Platforms, and Tools

Name: Yohanes Kent Tambalitan

NIM: 220611020227

2.1 ELECTRONIC COMMERCE MECHANISMS: AN OVERVIEW

Chapter 1 of the EC models and types of transactions introduces various mechanisms that
enable B2C applications on the Internet. These mechanisms include generic enablers of any
information system, specific EC mechanisms like electronic markets, shopping carts, e-catalogs,
and support services such as payment and order fulfillment. Moreover, there are different
methods for executing EC, such as buying at a fixed price or at an auction, and each method has
a different support mechanism. Finally, the chapter discusses Web 2.0-based collaboration and
communication mechanisms and special platforms like Pinterest. The purpose of this chapter is
to provide an understanding of these major EC mechanisms to facilitate comprehension of their
uses in the forthcoming chapters.

EC Activities and Support Mechanisms

1. Infrastructure: It includes the generic enablers of any information system, such as

databases, networks, security, software, server software, operating systems, hardware
(Web servers), and hosting services.

2. E-Marketing: It includes the use of the Internet and other digital technologies to promote
and sell products and services. E-marketing activities include advertising, search engine
optimization, email marketing, social media marketing, and affiliate marketing.

3. E-Sales: It includes the use of electronic channels to conduct sales transactions, such as
online shopping carts, e-catalogs, payment systems, order fulfillment, and customer
service.

4. E-Service: It includes the use of electronic channels to provide after-sales support and
services to customers, such as online self-service portals, help desk, and customer
relationship management (CRM) systems.
2.2 E-MARKETPLACES

Markets (electronic or otherwise) have four major functions:

• enabling transactions to occur by providing a meeting place for buyers and sellers;
• enabling the flow of relevant information;
• providing services associated with market transactions, such as payments and escrow;
and
• providing auxiliary services such as legal, auditing, and security

Electronic Markets

An electronic market, also known as an e-marketplace, is a virtual space where buyers

and sellers can engage in various types of transactions. It is the primary platform for conducting
EC transactions. Similar to a physical marketplace, buyers receive goods and services in
exchange for money or other goods and services. However, computerized systems make
electronic markets more efficient by providing updated information and support services, such as
rapid and smooth transaction execution. An e-marketplace provides the same functions as a
physical marketplace but is more efficient and provides additional support services.

Types of E-Marketplaces

• Private E-Marketplaces are those owned and operated by a single company.

Starbucks.com, dell.com, target.com, and united.com sell from their websites.
• Public E-Marketplaces Public e-marketplaces are in many cases B2B markets. They often
are owned by a third party (not a seller or a buyer) or by a group of buying or selling
companies (referred to as a consortium)

2.3 CUSTOMER SHOPPING MECHANISMS: WEBSTORES, MALLS, AND PORTALS

Webstores

A webstore (or storefront) refers to a single company’s (or individual seller’s) website
where products and services are sold.

Web (Information) Portals

A Web (information) portal is a single point of access, through a Web browser, to critical
business information located inside and outside of organizations.
 Types of Portals:

• Commercial (public) portals. These popular portals offer content for anyone.
• Corporate (private) portals. Corporate portals provide organized access to internal
corporate information.
• Patient Portals. Several companies offer patient portals. For example, Quality Systems,
Inc. (qsii.com) and mypop.healthcarepartners.com
• Publishing portals. These portals are intended for communities with specific interests and
involve relatively little customization of content; however, they provide extensive online
search features and some interactive capabilities.
• Mobile portals. Mobile portals are portals that are accessible from mobile devices. An
increasing number of portals are accessible via mobile devices
• Voice portals. Voice portals are websites, usually portals, with audio interfaces. This
means that they can be accessed by a standard telephone or a cell phone.

2.4 MERCHANT SOLUTIONS: ELECTRONIC CATALOGS, SEARCH ENGINES, AND

SHOPPING CARTS

Types of EC Searches

The three major types of EC searches are Internet/ Web search, enterprise search, and desktop
search.

• Internet/Web Search. This is the most popular search that involves looking for any
documents on the Web.
• Enterprise Search. An enterprise search describes the search for information within the fi
les and databases of an organization
• Desktop Search. A desktop search involves a search of a user’s own computer, searching
for documents is done by looking through all the information that is available on the
user’s PC.

Search Engines

Search engines deliver answers economically and efficiently by matching questions with
frequently asked question (FAQ) templates, which respond with “canned” answers. In general, a
search engine is a computer program that can access databases of Internet or intranet resources,
search for specific information or keywords, and report the results. Google and Bing are the most
popular search engines in the U.S. Baidu is the primary search engine in China. Portals such as
Yahoo! and MSN have their own search engines.
 Shopping Carts

An electronic shopping cart (also known as shopping bag or shopping basket is software
that allows customers to accumulate items they wish to buy before they arrange payment and
check out, much like a shopping cart in a supermarket. The electronic shopping cart software
program automatically calculates the total cost, and adds tax and shipping charges when
applicable. Customers can review and revise their shopping list before finalizing their purchase
by clicking on the “submit” button.

2.5 AUCTIONS, BARTERING, AND NEGOTIATING ONLINE

Definition and Characteristics

An online Auction is an electronic space where sellers and buyers meet and conduct
different types of transactions. This market mechanism uses a competitive process where a seller
solicits consecutive bids from buyers (forward e- auctions) or a buyer solicits bids from sellers
(reverse e-auctions).

Dynamic Pricing

Dynamic pricing refers to prices that are not fixed, but are allowed to fluctuate, and are
determined by supply and demand.

Traditional Auctions Versus E-Auctions Traditional,

Physical auctions are still very popular. However, the volume traded on e-auctions is
significantly larger and continues to increase. In addition, person-to-person auctions are done
mostly online.

Online Bartering

E-bartering (electronic bartering) – bartering conducted online – can improve the

matching process by attracting more partners to the barter. In addition, matching can be done
faster, and as a result, better matches can be found.

Online Negotiating

Dynamic prices also can be determined by negotiation. Negotiated pricing is commonly

used for expensive or specialized products. Negotiated prices also are popular when large
quantities are purchased. Much like auctions, negotiated prices result from interactions and
bargaining among sellers and buyers. Negotiation also deals with terms, such as the payment
method, timing, and credit.
2.6 VIRTUAL COMMUNITIES AND SOCIAL NETWORKS

Characteristics of Traditional Online Communities and Their Classification

Virtual communities, also known as Internet communities, are typically based on the
internet and can have hundreds of thousands, or even millions of members. This is in contrast to
traditional physical communities, which are typically smaller. Another difference is that offline
communities are often confined to one geographic location, while online communities are not.
Facebook is an example of a large internet-based community, with around 1.23 billion members
as of 2014. Virtual communities are growing rapidly, with hundreds of thousands of them
currently existing on the internet.

Classifications of Virtual Communities:

• Public Versus Private Communities can be designated as public, meaning that their
membership is open to anyone.

Social Network Services

Social network services (or sites) are companies that host social communities. They are
also known as social networks. The Size of Social Network Sites Social network sites are growing
rapidly, with some having over 100 million members. For example, in late 2013, Pinterest had 70 million
members. The typical annual growth of a successful site is 40–50% in the first few years and 15–25%
thereafter.

2.7 VIRTUAL WORLDS AS AN ELECTRONIC COMMERCE PLATFORM

Virtual worlds are three-dimensional online environments where users can create avatars
and interact with other users in real-time. These virtual worlds provide a unique platform for
electronic commerce. In virtual worlds, users can interact with products and services in a more
immersive and engaging way than traditional e-commerce platforms.

Virtual worlds can provide a more engaging experience for customers, as they can
interact with products and services in a more lifelike way. This can lead to a more emotional
connection to the products or services, which can result in increased customer satisfaction and
loyalty.

Virtual worlds also provide a platform for social commerce, where users can interact with
each other and share information about products and services. This can lead to increased brand
awareness and word-of-mouth marketing for businesses.
 Furthermore, virtual worlds can provide a platform for virtual events, such as product
launches or trade shows. These events can be attended by users from all over the world, making
it easier for businesses to reach a global audience.

In conclusion, virtual worlds offer a unique and engaging platform for electronic
commerce. They provide opportunities for social commerce, virtual events, and immersive
product experiences. As virtual worlds continue to grow in popularity, they are likely to become
an increasingly important platform for businesses looking to engage with customers in new and
innovative ways.

2.8 EMERGING EC PLATFORMS: AUGMENTED REALITY AND

CROWDSOURCING

Augmented Reality

Augmented reality is “a live or indirect view of a physical, real-world environment whose

elements are augmented (or supplemented) by computer-generated sensory input such as sound,
video, graphics or GPS data”.

Crowdsourcing

The term crowd refers to any group of people such as a group of consumers, employees
of a corporation, or members of a social network who offer expertise. A crowd is frequently
referred to a large group. Crowdsourcing utilizes crowds to collectively execute tasks such as
solving problems, innovating, or getting large projects completed by dividing the work among
many people.

2.9 THE FUTURE: WEB 3.0, WEB 4.0 AND WEB 5.0

The terms "Web 3.0," "Web 4.0," and "Web 5.0" are sometimes used to refer to potential
future iterations of the internet that may be more advanced and sophisticated than the current
web. However, these terms are not universally agreed upon, and there is no precise definition of
what each of them may entail.

Web 3.0:

Web 3.0 is sometimes referred to as the "Semantic Web." It refers to a possible future
version of the internet that is more intelligent and better able to understand the meaning of the
data it contains. Web 3.0 may use technologies such as natural language processing, machine
learning, and artificial intelligence to better categorize and organize information on the internet.
The goal of the Semantic Web is to make it easier for humans and machines to find, share, and
reuse information online.
 Web 4.0:

Web 4.0 is an even more speculative concept that envisions a future internet that is based
on a fully integrated, intelligent network of devices and sensors. It is sometimes referred to as the
"Intelligent Web" or the "Symbiotic Web." In this vision, every device and object in the world
would be connected to the internet and able to communicate with each other. This would create a
massive network of information that could be analyzed and used to make better decisions about
everything from traffic patterns to healthcare.

Web 5.0:

Web 5.0 is an even more speculative term that envisions a future internet that is even
more advanced and transformative than the previous iterations. It is sometimes referred to as the
"Emotional Web" or the "Sentient Web." This vision involves creating a fully immersive and
interactive internet that is able to understand and respond to human emotions. This would require
advanced artificial intelligence and machine learning algorithms that are capable of
understanding and interpreting human emotions, as well as technologies such as virtual reality
and augmented reality to create a more immersive online experience.

It's important to note that these terms are more aspirational than anything else. There is
no guarantee that the future of the internet will follow this path, and it's likely that any future
versions of the web will be shaped by a range of social, cultural, and technological factors that
are difficult to predict.