INTRODUCTION TO E-

COMMERCE
WHY YOU SHOULD STUDY E-
COMMERCE?
• Technology continues to evolve at exponential rates.
• This underlying ferment presents entrepreneurs with opportunities to
create new business models and businesses in traditional industries and
in the process, disrupt, and in some instances, destroy existing business
models and firms.
• The rapid growth of e-commerce is providing extraordinary growth in career
and employment opportunities.
• The twenty-first century will be the age of a digitally enabled social and
commercial life, the outlines of which we can still only barely perceive at
this time.
• Analysts estimate that by 2023, consumers worldwide are spending around
$7 trillion and businesses over $32 trillion in digital transactions. It appears
likely that e-commerce will eventually impact nearly all commerce, and that
most commerce will be e-commerce by the year 2050, if not sooner.
WHY YOU SHOULD STUDY E-
COMMERCE (cont.)
• Understand the opportunities and risks.
• Identify the technological, business, and social forces.
• Enable to analyze
• an existing or new idea for an e-commerce business,
• identify the most effective business model to use, and
• understand the technological underpinnings of an e-commerce
presence
INTRODUCTION TO E-COMMERCE
• E-commerce involves the use of the Internet, the World
Wide Web (Web), and mobile apps and browsers running
on mobile devices to transact business.
• The Internet is a worldwide network of computer
networks.
• The Web is one of the Internet’s most popular services,
providing access to billions of web pages.
• A mobile browser is a version of web browser software
accessed via a mobile device
• E-commerce can be defined as digitally enabled commercial
transactions between and among organizations and
individuals.
• Digitally enabled transactions include all transactions
mediated by digital technology. For the most part, this means
transactions that occur over the Internet, the Web, and/or via
mobile devices.
• Commercial transactions involve the exchange of value (e.g.,
money) across organizational or individual boundaries in
return for products and services. Exchange of value is
important for understanding the limits of e-commerce. Without
an exchange of value, no commerce occurs.
THE DIFFERENCE BETWEEN E-
COMMERCE AND E-BUSINESS
• E-commerce is not “anything digital” that a firm does.
• e-business refer to the digital enabling of transactions and processes within a
firm, involving information systems under the control of the firm.
• e-business does not include commercial transactions involving an exchange of
value across organizational boundaries. For example, a company’s online
inventory control mechanisms are a component of e-business, but such internal
processes do not directly generate revenue for the firm from outside businesses
or consumers, as e-commerce, by definition, does.
• It is true, however, that a firm’s e-business infrastructure provides support for
online e-commerce exchanges; the same infrastructure and skill sets are involved
in both e-business and e-commerce.
• E-commerce and e-business systems blur together at the business firm boundary,
at the point where internal business systems link up with suppliers or customers.
• E-business applications turn into e-commerce precisely when an exchange of
value occurs.
TECHNOLOGICAL BUILDING BLOCKS
UNDERLYING E-COMMERCE
• The Internet is a worldwide network of computer networks.
• Created in the late 1960s to connect a small number of
mainframe computers and their users, the Internet has since
grown into the world’s large
• It is impossible to say with certainty exactly how many
computers and other mobile devices, are connected to the
Internet worldwide at any one time.
• But some experts estimate that as of 2019, there were
anywhere from around 10 billion to 25 billion connected
devices already installed (Fuscaldo, 2020; Maayan, 2020).
Thest network.
TECHNOLOGICAL BUILDING BLOCKS
UNDERLYING E-COMMERCE
• The World Wide Web (the Web) is an information system
that runs on the Internet infrastructure. The Web was
developed in the early 1990s.
• The Web provides access to billions of web pages indexed by
• Google and other search engines. These pages are created in
a language called HTML (HyperText Markup Language).
• Google has identified over 130 trillion individual web pages,
up from 30 trillion in 2013, although many of these pages do
not necessarily contain unique content (Schwartz, 2016).
TECHNOLOGICAL BUILDING BLOCKS
UNDERLYING E-COMMERCE
• In addition to this “surface” or “visible” Web, there is
also the so-called deep Web that is reportedly 500 to
1,000 times greater than the surface Web. The deep
Web contains databases and other content that is not
routinely identified by search engines such as Google
TECHNOLOGICAL BUILDING BLOCKS
UNDERLYING E-COMMERCE
• The mobile platform provides the ability to access the
Internet from a variety of mobile
MAJOR TRENDS IN E-COMMERCE, 2020–2021
MAJOR TRENDS IN E-COMMERCE, 2020–2021
MAJOR TRENDS IN E-COMMERCE, 2020–2021
 UNIQUE
FEATURES
OF E-
COMMERCE
TECHNOLOG
Y
UBIQUITY
• In traditional commerce, a marketplace is a physical
place you visit in order to transact. E-commerce, in
contrast, is characterized by its ubiquity: it is available
just about everywhere, at all times. It liberates the
market from being restricted to a physical space and
makes it possible to shop from your desktop, at home,
at work, or even from your car, using mobile e-
commerce. The result is called a marketspace—a
marketplace extended beyond traditional boundaries
and removed from a temporal and geographic location.
GLOBAL REACH
• E-commerce technology permits commercial
transactions to cross cultural, regional, and national
boundaries far more conveniently and cost-effectively
than is true in traditional commerce.
• As a result, the potential market size for e-commerce
merchants is roughly equal to the size of the world’s
online population (an estimated 4 billion in 2020)
(eMarketer, Inc., 2020e)
UNIVERSAL STANDARDS
• One strikingly unusual feature of e-commerce technologies is that the
technical standards of the Internet, and therefore the technical standards
for conducting e-commerce, are universal standards—they are shared
by all nations around the world. In contrast, most traditional commerce
technologies differ from one nation to the next. For instance, television
and radio standards differ around the world, as does cell phone
technology.
• The universal technical standards of e-commerce greatly lower market
entry costs.
• At the same time, for consumers, universal standards reduce search
costs.
• And by creating a single, one-world marketspace, where prices and
product descriptions can be inexpensively displayed for all to see, price
discovery becomes simpler, faster, and more accurate
RICHNESS
• Information richness refers to the complexity and
content of a message.
• E-commerce technologies have the potential for offering
considerably more information richness than traditional
media such as printing presses, radio, and television
because they are interactive and can adjust the
message to individual users.
INTERACTIVITY
• e-commerce technologies allow for interactivity:
enable two-way communication between merchant and
consumer and among consumers.
• Traditional television or radio, for instance, cannot ask
viewers questions or enter into conversations with
them, or request that customer information be entered
into a form.
INFORMATION DENSITY
• Information density the total amount and quality of
information available to all market participants.
• E-commerce technologies reduce information collection,
storage, processing, and communication costs.
• At the same time, these technologies greatly increase
the currency,
• accuracy, and timeliness of information—making
information more useful and
• important than ever.
PERSONALIZATION AND
CUSTOMIZATION
• E-commerce technologies permit personalization:
merchants can target their marketing messages to
specific individuals by adjusting the message to a
person’s name, interests, and past purchases.
• The technology also permits customization—changing
the delivered product or service based on a user’s
preferences or prior behavior.
SOCIAL TECHNOLOGY: USER-GENERATED
CONTENT AND SOCIAL NETWORKS
• e-commerce technologies have evolved to be much
more social by allowing users to create and share
content with a worldwide community.
• Using these forms of communication, users are able to
create new social networks and strengthen existing
ones.