E-Commerce

Term V, MBA

Dr. Anupriya Khan

Information Systems & Business Analytics Area
Indian Institute of Management Ranchi
 Component Weightage
End term exam 35%
Mid-term exam 25%
Assignments 10%
Term project 1 15%
Term project 2 15%

09/24/2024 Session 1 2
▪ E-Commerce / Electronic commerce
▪ Using the Internet and other networks (e.g., intranets) to transact
business
▪ To purchase, sell, transport, or trade data, goods, or services
▪ E-Business
▪ Different opinions
▪ Not just the buying and selling of goods and services; Conducting all
kinds of business online, such as servicing customers, collaborating
with business partners, delivering e-learning, and conducting
electronic transactions within organizations
▪ Digital enabling of transactions and processes within a firm

09/24/2024 Session 1 3
09/24/2024 Session 1 4
 E-commerce as % of total retail sales worldwide

09/24/2024 Session 1 5
 How many people shop online?

09/24/2024 Session 1 6
 How many people shop online?

09/24/2024 Session 1 7
 The early years of e-commerce
▪ 1995-2000: Invention
▪ During the late 1990s- It was a period of business vision,
inspiration, and experimentation
▪ Heavy venture capital investment
▪ Selling retail goods—simple goods

09/24/2024 Session 1 8
 The early years of e-commerce
▪ 2001-2007: Consolidation
▪ A period of retrenchment and reevaluation
▪ The stock market crash of 2000–2001
▪ Emphasis on business-driven approach
▪ Retail + services
▪ Retail e-commerce grew at more than 25% per year

09/24/2024 Session 1 9
 Today’s e-commerce
▪ 2007-Present: Reinvention
▪ Another transition
▪ Use of social networks
▪ Mobile devices and apps
▪ On-demand services that are local and personal

09/24/2024 Session 1 10
 Pure Versus Partial EC
▪ Depending on the nature of the three major activities:
▪ Ordering and payments, order fulfillment, and delivery to customers
▪ Each activity can be done physically or digitally
▪ Pure EC: If all activities are digital
▪ No EC: If none are digital
▪ Partial EC: If at least one digital dimension

09/24/2024 Session 1 11
 EC Organizations
▪ Brick-and-mortar
▪ Purely physical organizations
▪ Virtual (pure-play) organizations
▪ Digital presence; no physical presence
▪ Click-and-mortar (click-and-brick)
▪ Conduct some EC activities
▪ Have both physical and digital presence

09/24/2024 Session 1 12
 Unique Features of E-commerce Technology

09/24/2024 Session 1 13
 Ubiquity
▪ EC is available just about everywhere, at all times
▪ Gives access to a marketspace
▪ A marketplace extended beyond traditional boundaries and removed
from a temporal and geographic location

▪ From a consumer point of view, ubiquity reduces transaction

costs and lowers the cognitive energy required to transact in a
marketspace

09/24/2024 Session 1 14
 Global Reach
▪ Reach: the number of users or customers an e-commerce
business can obtain
▪ Commercial transactions cross cultural, regional, and national
boundaries
▪ Most traditional commerce is local or regional

09/24/2024 Session 1 15
 Universal Standards
▪ Standards (i.e., Internet) shared by all nations
▪ Lower market entry costs—the cost merchants must pay to bring their
goods to market
▪ Reduced search costs—the effort required to find suitable products
▪ Simpler, faster, and more accurate Price discovery
▪ Find many of the suppliers, prices, and delivery terms of a specific
product

09/24/2024 Session 1 16
 Information Richness
▪ The complexity and content of a message
▪ Traditional commerce has a great richness of face-to-face service using
aural and visual cues when making a sale
▪ But there is a trade-off between richness and reach
Benefits of Richness in EC
▪ Interactive. Thus more information richness than traditional media
▪ Chatting with an online customer support person
▪ Sell ‘complex’ goods and services
▪ Compare All (Prices, attributes, Services etc.)

09/24/2024 Session 1 17
 Can you name
The Most Challenging Products To Sell Online
?

09/24/2024 Session 1 18
 Interactivity
▪ Two-way communication between merchant and consumer
and among consumers
▪ Customer Support
▪ Customer Reviews
▪ Feedback, FAQ’s, Newsletter Option
▪ E-mail Support
▪ Live Help with customer representative

09/24/2024 Session 1 19
 Information Density
▪ The total amount and quality of information available to all
market participants, consumers, and merchants
▪ Reduces information collection, storage, processing, and
communication costs
▪ Increases the currency, accuracy, and timeliness of information
▪ Greater price transparency- for customers
▪ Greater Cost transparency- for customers
▪ Marketers to practice price discrimination (Segmentation)

09/24/2024 Session 1 20
 Personalization/Customization
◼ Personalization: The targeting of marketing messages to
specific individuals
▪ By adjusting the message to a person’s name, interest, and past
purchases.
◼ Customization: Changing the delivered product or service
based on a user’s preferences or prior behavior

09/24/2024 Session 1 21
 Electronic Markets
▪ E-marketplace (marketspace)
▪ An online location where buyers and sellers conduct commercial
transactions such as selling goods, services, or information
▪ Much more efficient than the physical market
• Lower search time
• Reduced information misunderstanding
• Ubiquity

09/24/2024 Session 1 22
 Components
▪ Customers
▪ Sellers
▪ Products and services
▪ Infrastructure
▪ Front end
▪ Back end
▪ Intermediaries

09/24/2024 Session 1 23
 Intermediaries
▪ Services of intermediaries:
▪ Provide relevant information about demand, supply, prices, trading
requirements
▪ Match sellers and buyers
▪ Offer value-added services (transfer of products, escrow, payment
arrangements, consulting)
▪ Disintermediation: elimination of the first two services
▪ Reintermediation: re-entry of some new intermediaries

09/24/2024 Session 1 24