Unit 1

Definition of E-Commerce:
E-Commerce or Electronic Commerce means buying and selling of goods, products, or
services over the internet. E-commerce is also known as electronic commerce or internet
commerce. These services provided online over the internet network. Transaction of money,
funds, and data are also considered as E-commerce.
These business transactions can be done in four ways: Business to Business (B2B), Business
to Customer (B2C), Customer to Customer (C2C), Customer to Business (C2B). The standard
definition of E-commerce is a commercial transaction which is happened over the internet.
Online stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are examples of E-
commerce websites.

Understanding E-commerce:
As noted above, e-commerce is the process of buying and selling tangible products and
services online. It involves more than one party along with the exchange of data or currency
to process a transaction. It is part of the greater industry that is known as electronic business
(e-business), which involves all of the processes required to run a company online.

E-commerce has helped businesses (especially those with a narrow reach like small
business) gain access to and establish a wider market presence by providing cheaper and
more efficient distribution channels for their products or services. Target (TGT) supplemented
its brick-and-MORTAR presence with an online store that allows customers to purchase
everything from clothes and coffeemakers to toothpaste and action figures right from their
homes.

Providing goods and services isn't as easy as it may seem. It requires a lot of research about
the products and services you wish to sell, the market, audience, competition, as well as
expected business costs.

History of E-commerce:
Most of us have shopped online for something at some point, which means we've taken part
in e-commerce. So it goes without saying that e-commerce is everywhere. But very few
people may know that e-commerce has a history that goes back to before the internet began.

E-commerce actually goes back to the 1960s when companies used an electronic system
called the Electronic Data Interchange to facilitate the transfer of documents. It wasn't until
1994 that the very first transaction. took place. This involved the sale of a CD between friends
through an online retail website called NetMarket.

The industry has gone through so many changes since then, resulting in a great deal of
evolution. Traditional brick-and-mortar retailers were forced to embrace new technology in
order to stay afloat as companies like Alibaba, Amazon, eBay, and Etsy became household
names. These companies created a virtual marketplace for goods and services that
consumers can easily access.

New technology continues to make it easier for people to do their online shopping. People
can connect with businesses through Smartphones and other devices and by downloading
apps to make purchases. The introduction of free shipping, which reduces costs for
consumers, has also helped increase the popularity of the e-commerce industry.
Advantages and Disadvantages of E-commerce:
Advantages:
E-commerce offers consumers the following advantages:

• Convenience: E-commerce can occur 24 hours a day, seven days a week. Although
eCommerce may take a lot of work, it is still possible to generate sales as you sleep
or earn revenue while you are away from your store.
• Increased Selection: Many stores offer a wider array of products online than they
carry in their brick-and-mortar counterparts. And many stores that solely exist online
may offer consumers exclusive inventory that is unavailable elsewhere.
• Potentially Lower Start-up Cost: E-commerce companies may require a warehouse
or manufacturing site, but they usually don't need a physical storefront. The cost to
operate digitally is often less expensive than needing to pay rent, insurance, building
maintenance, and property taxes.
• International Sales: As long as an e-commerce store can ship to the customer, an
e-commerce company can sell to anyone in the world and isn't limited by physical
geography.
• Easier to Retarget Customers: As customers browse a digital storefront, it is easier
to entice their attention towards placed advertisements, directed marketing
campaigns, or pop-ups specifically aimed at a purpose.

Disadvantage:

There are certain drawbacks that come with e-commerce sites, too. The
disadvantages include:

• Limited Customer Service: If you shop online for a computer, you cannot simply ask
an employee to demonstrate a particular model's features in person. And although
some websites let you chat online with a staff member this is not a typical practice.
• Lack of Instant Gratification: When you buy an item online, you must wait for it to
be shipped to your home or office. However, e-tailers like Amazon make the waiting
game a little bit less painful by offering same-day delivery as a premium option for
select products.
• Inability to Touch Products: Online images do not necessarily convey the whole
story about an item, and so e-commerce purchases can be unsatisfying when the
products received do not match consumer expectations. Case in point: an item of
clothing may be made from shoddier fabric than its online image indicates.
• Reliance on Technology: If your website crashes, garners an overwhelming amount
of traffic, or must be temporarily taken down for any reason, your business is
effectively closed until the e-commerce storefront is back.
• Higher Competition: Although the low barrier to entry regarding low cost is an
advantage, this means other competitors can easily enter the market. E-commerce
companies must have mindful marketing strategies and remain diligent on SEO
optimization to ensure they maintain a digital presence.
 Pros Cons
Owners can generate Limited customer service
revenue semi-passively opportunities as there is
little to no face-to-face
opportunities

Consumers can easily Lacks instant gratification

browse for specific as customers must
products believe in a product before
seeing it in person

Greater earning potential Products can't been seen

as there are no limitations or handled until delivered
on physical location as (can't try before they buy)
long you can ship there

Reduced costs assuming Loss of revenue or income

digital presence costs less when websites go down
than building, insurance,
taxes, and repairs.

Greater marketing control, High reliance on shipping

including data extraction constraints
from customers, targeted
ads, and pop-up Higher competition due to
placement lower barriers of entry and
greater customer potential

Types of E-commerce
Depending on the goods, services, and organization of an ecommerce company, the
business can opt to operate several different ways. Here are several of the popular business
models.

Business-to-Consumer (B2C)
B2C e-commerce companies sell directly to the product end-user. Instead of distributing
goods to an intermediary, a B2C company performs transactions with the consumer that will
ultimately use the good.
This type of business model may be used to sell products (like your local sporting goods
store's website) or services (such as a lawn care mobile app to reserve landscaping services).
This is the most common business model and is likely the concept most people think about
when they hear the term e-commerce.

Business-to-Business (B2B)
Similar to B2C, an e-commerce business can directly sell goods to a user. However, instead
of being a consumer, that user may be another company. B2B transactions often entail larger
quantities, greater specifications, and longer lead times. The company placing the order may
also have a need to set recurring goods if the purchase is for recurring manufacturing
processes.

Business-to-Government (B2G)
Some entities specialize as government contractors providing goods or services to agencies
or administrations. Similar to a B2B relationship, the business produces items of value and
remits those items to an entity.

B2G e-commerce companies must often meet government requests for proposal
requirements, solicit bids for projects, and meet very specific product or service criteria. In
addition, there may be joint government endeavours to solicit a single contract through a
government-wide acquisition contract.

Consumer-to-Consumer (C2C)
Established companies are the only entities that can sell things. E-commerce platforms such
as digital marketplaces connect consumers with other consumers who can list their own
products and execute their own sales.

These C2C platforms may be auction-style listings (i.e. eBay auctions) or may warrant further
discussion regarding the item or service being provided (i.e. Craigslist postings). Enabled by
technology, C2C e-commerce platforms empower consumers to both buy and sell without
the need for companies.

Consumer-to-Business (C2B)
Modern platforms have allowed consumers to more easily engage with companies and offer
their services, especially related to short-term contracts, gigs, or freelance opportunities. For
example, consider listings on Upwork.

A consumer may solicit bids or interact with companies that need particular jobs done. In this
way, the e-commerce platform connects businesses with freelancers to enable consumers
greater power to achieve pricing, scheduling, and employment demands.

Consumer-to-Government (C2G)
Less of a traditional e-commerce relationship, consumers can interact with administrations,
agencies, or governments through C2G partnerships. These partnerships are often not in the
exchange of service but rather, the transaction of obligation.

For example, uploading your federal tax return to the internal revenue services (IRS) digital
website is an e-commerce transaction regarding an exchange of information. Alternatively,
you may pay your tuition to your university online or remit property tax assessments to your
county assessor.
E-COMMERCE APPLICATIONS:

Globally E-Commerce is applied in the following fields.

1. E Marketing 2. E-Advertising 3. E-Banking 4. Mobile Commerce 5. E-Learning 6. E-

Shopping 7. Online training 8. Search Engines 9. Entertainment

1)E-MARKETING :-

✓ E-Marketing also known as Internet marketing, Online marketing, Web marketing.

✓ It is the marketing of products or services over the internet.
✓ It is consider to be broad in scope because not refers to marketing on the internet but
also done in Email and wireless media.
✓ E-Marketing ties together the creative and technical aspects of the internet, including
design development, advertising and sales.
✓ Internet marketing is associated with several business models ie., B2C, B2B, C2C.
Internet marketing is inexpensive when examine the ratio of cost to the reach of the
target.

2)E-ADVERTISING:

✓ It is also known as online advertising it is a form of promotion that uses internet and
world wide web to deliver marketing messages to attracts customers.
✓ Example: Banner ads, Social network advertising, online classified advertising etc.,

✓ The growth of these particular media attracts the attention of advertisers as a more
productive source to bring in consumers.
✓ An online advertisement also offers various forms of animation.
✓ The term online advertisement comprises all sorts of banner advertisement, email
advertising, in game advertising and key soon.

3) E-BANKING OR INTERNET BANKING:

 ✓ Means any user with a personal computer and browser can get connected to his banks,
website to perform any of the banking functions.
✓ In internet banking system the bank has a centralized data base i.e., web-enabled.
✓ Best example for E-Banking is ATM. An ATM is an electronic fund transfer terminal
capable of handling cash deposits, transfer between ALCS, Balance enquiries, cash
withdrawals, and pay bills.

SERVICES THROUGH E-BANKING:

✓ Bill payment service.

✓ Fund Transfer
✓ Investing through internet Banking
✓ Shopping Customers should never share personal information’s like pin nos.,
passwords, etc., with any one .
✓ Through internet banking, you can check your transactions at any time of the day, and
as many times as you want.

4) MOBILE-COMMERCE: Mobile Commerce also known as M-Commerce, is the ability to

conduct, commerce as a mobile device, such as mobile phone.

SERVICES ARE:

✓ Mobile ticketing
✓ Mobile Vouchers, Coupons and
✓ Mobile contract purchase and delivery mainly consumes of the sale of ring tones,
wallpapers and games of mobile phones.
✓ Local base services Local discount offers Local weather
✓ Information services News Sports, Scores
✓ 6.Mobile Banking, Banks and other financial institutions used mobile commerce to
allow their customers to assess account information and make transactions, such as
purchasing, withdrawals etc.,
✓ Mobile Browsing: Using a mobile browser- A www browser on mobile device customers
can shop online without having to be at their personal computer.

5) E-LEARNING:

✓ E-Learning is essentially the computer and network-enabled transfer of skills and

knowledge. E-Learning comprises all forms of electronically supported learning and
teaching.
✓ E-Learning applications and processes include web-based learning, computer-based
learning. Content is delivered via.

✓ The internet, intranet/extranet, audio, or video tape, satellite TV, and ED-ROM.
Computer-Based Learning, sometimes abbreviated to CBL, refers to the use of
computers as a key component of the education environment.
✓ E-Learning is naturally suited to distance and flexible learning, but can also be used
conjunction with face-to-face teaching.
✓ E-Learning can also refer to the educational website such as those offering learning
scenarios worst and interactive exercises for children.
✓ Communication technologies are used in E-Learning. A learning management system
(LMS) is software used for delivering, tracking, and managing training /education.

6) ONLINE SHOPPING
 ✓ Online shopping is the process where by consumer directly buy goods or services from
a sell in real time, without an intermediary services over the internet .it is a form of E-
commerce
✓ An online shop, e-shop, e-store, internet shop web shop, web store, online store, or
virtual shop evokes the physical analogy of buying products or services in a shopping
center.
✓ The process is called business-to-consumer (B2C) online shopping. When a business
buys from another business it is called business-to-business (B2B) online shopping.
✓ In order to shop online, one must be able to have access to a computer, a bank account
and debit card. Online shopping widened the target audience to men and women of
the middle class.
✓ Online shoppers commonly use credit card to make payments , however some
systems enable users to create accounts and pay by alternative means ,such as

1. Billing to mobile phones and landline.

2. Cheque.

3. Debit cards.

4. Gift cards

5. Postal money order.

✓ Online stores are usually available 24 hours a day, and many consumers have internet
access both at work and at home.
✓ Online stores must describe products for sale with text, phones, and multimedia files.
✓ One advantage of shopping online is being able to quickly seek out deals for items or
services with many different vendors.
✓ Another major advantage for retailers is the ability to rapidly switch suppliers and
vendors without disrupting users shopping experience.

7) SEARCH ENGINE:-

✓ A web search engine is designed to search for information on the WWW and FTP
servers.
✓ The search results are generally presented in list of result and are often called hits.
✓ The information may consist of web pages, images, information, and other types of
files.
✓ Some search engines also mine data available in database or open directories.
✓ Search engines work by storing information about many web pages, which they
retrieve from the HTML it self.
✓ When a user enters a query into a search engine (typically by using keywords), the
engine examines its index and provides a listing of best matching according to its
criteria.
✓ Most search engines support the use of Boolean operator AND, OR, and NOT.
✓ Some search engines, such as GOOGLE, store all or part of the source page as well
as information about the web pages.

8) ONLINE TRADING:-

✓ An online trading community provides participants with a structured method for trading
bantering (exchanging goods with goods) or selling goods and services.
 ✓ These communities often have forums and chat rooms, designed to facilitate
communication between the members.
✓ A formal trading community consists of a website or network of websites that facilitates
and track made transactions.
✓ While trading any used items online, be sure to include the condition and quality of the
product so as the receiver can determine its overall value.
✓ A trading circle is a form of online trading design to facilitate viewing of television series
and episode media.

9) ENTERTAINMENT:-

The conventional media that have been used for entertainment are

1. Books/magazines. 2. Radio. 3. Television/films. 4. Video games.

✓ The internet as an entertainment media is not a elastic by itself, but rather a unique
interactions of all of the above media.
✓ Computer based systems have been used as an entertainment medium in the form of
video games , CD , ROMs , etc..
✓ Online books /newspapers, online radio, online television, online firms, and online
games are common place in internet where we can entertain.
✓ Online social networking websites are one of the biggest sources of E-entertainment
for today’s tech-savvy (who have knowledge interest in) generation.

Elements of e commerce-
✓ Responsive design
✓ Web speed optimization
✓ User-friendly navigation
✓ Customer support
✓ Ecommerce website Security and Privacy
✓ Right eCommerce platform
✓ Products with Description
✓ Accurate Checkout option

Principle of e-commerce
✓ Instant messaging
✓ Online shopping and order tracking
✓ Online banking
✓ Shopping cart software
✓ Teleconferencing
✓ Electronic tickets

Messaging and information distribution -This layer consists of software for

sending and receiving messages. Its purpose is to deliver a message from a
server to a client. For example, it could move an HTML file from a Web server
to a client running Netscape. Messages can be unformatted (e.g., e-mail) or
formatted (e.g., a purchase order). Electronic data interchange (EDI), e-mail,
and hypertext text transfer protocol (HTTP) are examples of messaging
software.