Chapter One

Overview of E-Commerce
Badimaw T.
March 2023
 E-Commerce and E-Business
 Electronic Commerce
 Refers to a wide range of online business activities for products and
services.
 Any form of business transaction in which the parties interact
electronically rather than by physical exchanges or direct physical
contact.
 Usually associated with buying and selling over the Internet, or
 Conducting any transaction involving the transfer of ownership or
rights to use goods or services through a computer-mediated
network. 2
 E-Commerce and E-Business cont’d…
 Electronic Business
 The application of information communication technology (ICT) in
support of all activities of business.
 The transformation of an organization’s processes to deliver
additional customer value through the application of:
 Technologies,
 Philosophies, and
 Computing paradigm of the new economy.
 It is doing business with the help of ICT like Internet network.
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 The Difference
 The use of ICT:
 In e-commerce, ICT is used in inter-business or inter-organizational
transactions.
 In e-business, on the other hand, ICT is used to enhance one’s
business.
 It includes any process that a business organization (either a for-
profit, governmental or non-profit entity) conducts over a
computer mediated network.

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 Unique features of E-Commerce
 There are seven key features of e-commerce technologies. These
are:
(1) Ubiquity: available just about everywhere at all time.
 Technology is available everywhere, at work, at home, and
elsewhere via mobile device, anytime.
 Shopping can take place anywhere with reduced costs and
enhanced consumer convenience.

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 Unique features of E-Commerce cont’d…
(2) Global Reach: total number of users or customers an e-commerce
business can have.
 Technology reaches beyond national boundaries.
 Commerce is enabled across cultural and national boundaries
seamlessly and without modification.
 Marketplace includes potentially billions of consumers and
millions of businesses world-wide.

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 Unique features of E-Commerce cont’d…
(3)Universal Standards: standards that are shared by all nations
around the world.
 There are a set of technology standards called Internet Standards:
 Lower market entry costs,
 Reduce product search cost by creating one world market
place,
 Faster and more accurate,
 Easily find all the suppliers, prices, and delivery terms of a
specific product anywhere in the world.
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 Unique features of E-Commerce cont’d…
(4) Richness: the complexity and content of a message.
Video, Audio and Text Messages are possible E-Commerce
technologies that have changed the traditional tradeoff between
Richness and the Reach.
(5) Interactivity: two way communication.
 Consumers are engaged in a dialogue that dynamically adjusts
the experience to the individual, and
 Make the consumer a co- participant in the process of delivering
goods to the market.
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 Unique features of E-Commerce cont’d…
(6) Information Density: reduce information cost while raising its
quality.
(7) Personalization/Customization: targeting of marketing message to
a specific individual by adjusting the message to a person`s
name, interest & past purchases.
 Technology allows personalized messages to be delivered to
individuals as well as groups based on characteristics.

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 Traditional Vs Electronic Commerce
Traditional Commerce Electronic Commerce
 Manual processing of transactions  Automatic processing of transactions
 Limited time of accessibility  24×7×365
 Goods cannot be inspected physically
 Goods can be inspected before purchase.
physically before purchase.
 Face-to-face customer interaction  Screen-to-face
 Worldwide reach
 Scope of business limited to
particular area .
 No uniform platform for  Provides a uniform platform for
exchange of information. information exchange.
 Resource focuses on demand side.
 Resource focuses on supply side 10
 Traditional Vs Electronic Commerce
Traditional Commerce Electronic Commerce
Payment through cash,  Credit card, fund transfer, etc.
credit card, cheque, etc.
Instant delivery of goods and  Delivery of goods and services takes
services time
Linear business relationship  End to end business relationship.

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 Major Types of E-Commerce
(1) Business-to-Business(B2B):
 Describes commerce transactions between businesses, such as:
 Between a manufacturer and a wholesaler, or
 Between a wholesaler and a retailer.
 It is used in marketing of goods and services used by enterprises.

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 Major Types of E-Commerce cont’d…
(2) Business-to-Consumer (B2C):
 Describes activities of businesses serving end consumers with
products and/or services.
 It applies for any business or organization that sells its products or
services to consumers over the Internet for its own use. Includes:
 Online banking,
 Travel services,
 Online auctions,
 Health information, and
 Real estate sites. 13
 Major Types of E-Commerce cont’d…
(3) Business-to-Government (B2G): is a derivative of B2B marketing.
 Often referred to as a market definition of "public sector marketing"
 Marketing products and services to various government levels
through integrated marketing communication techniques such as:
 Strategic public relations,
 Branding,
 Advertising, and
 Web-based communications.
 B2G networks provide a platform for businesses to bid on
government opportunities. 14
 Major Types of E-Commerce cont’d…
(4) Consumer-to-Business (C2B):
 Is an electronic commerce business model in which consumers
(individuals) offer products and services to companies and
companies pay them.
 Eg: A book on Amazon.com;
 The author offers a link back to an online business facilitating
the purchase of some product, and
 The business pays the author from a successful sale.

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 Major Types of E-Commerce cont’d…
(5) Consumer-to-Consumer (C2C):
 Electronically facilitated transactions between consumers through
some third party.
 Eg: The online auction;
 A consumer posts an item for sale and other consumers bid to
purchase it,
 The third party generally charges a flat fee or commission.
 The sites are only intermediaries, just there to match consumers.
 As a result, they do not have to check quality of the products
being offered. 16
 Major Types of E-Commerce cont’d…
(6) Government-to-Business (G2B):
 The online noncommercial interaction between local and central
government and the commercial business sector.
 It can be accessing government websites to get information on some
issues.

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 Successes in E-Commerce
Regulation of product Making superb first
pricing impression

Maintaining high Secure shipments

Improving store Making advantage of

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 Academic Disciplines Contributing to
E-Commerce Research
 Sociology:
 Internet Usage
 Role of social inequality in skewing Internet benefits
 The use of the Web as a personal and group communications tool
 Finance and accounting:
 E-commerce firm valuation
 Accounting practices

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 Academic Disciplines Contributing to
E-Commerce Research cont’d…
 Management:
 Entrepreneurial behavior
 Challenges faced by young firms that are required to develop
organizational structures in short time spans.
 Marketing:
 Consumer response to online marketing and advertising campaigns
and the ability of firms to brand
 Segment markets
 Target audiences
 Position products to achieve higher returns on investment. 21
 Academic Disciplines Contributing to
E-Commerce Research cont’d…
 Computer Science:
 Application of Internet technology
 Information Systems:
 Firm and industry value chains
 Industry structure
 Cooperate strategy
 Economics:
 Online consumer behavior
 Features of digital electronic markets. 22
 Limitations of E-Commerce
 To organizations:
 Lack of sufficient system security, reliability, standards and
communication protocols,
 Rapidly evolving and changing technology,
 Under pressure to innovate and develop business model to
exploit the new opportunities,
 Increased competition.

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 Limitations of E-Commerce cont’d…
 To consumers:
 Costs of computing equipment,
 Access to Internet,
 Maintenance,
 Updating the software to be compatible to the advancements
in the technology with time.
 Lack of security and privacy of personal data,
 Physical contacts and relationships are replaced by electronic
processes.
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 Limitations of E-Commerce cont’d…
 To society:
 Breakdown in human interaction,
 Social division,
 To much of reliance on telecommunications infrastructure,
power and IT skills,
 Wasted Resources – trouble to dispose the outdated and old
hardware.

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Thanks!
Questions?
You can find me at:
[email protected]
[email protected]

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