E- COMMERCE

BBA- 3rd semester

Dr. Aniket Sane
Assistant professor
INTRODUCTION TO COMMERCE
 Commerce is the exchange of something of value
between two entities.
 That “something” may be goods, services,

information, money, or anything else the two entities

consider to have value.
 Commerce is the central mechanism from which

capitalism is derived.
INTRODUCTION TO E-COMMERCE
 Electronic Commerce commonly written as E-
Commerce, is the trading in products or services using
computer networks, such as Internet.
 E- Commerce is a methodology of modern business

which address the need of business organisations,

vendors, and customers to reduce the cost and improve
the quality of goods and services while increasing the
speed of delivery.
 It is a paperless exchange of business information.
Cont.
 E-Commerce comprises of exchange of business
information using following ways

• Electronic Data Exchange (EDE)

• Electronic Mail (e-mail)
• Electronic Fund Transfer (EFT)
• Electronic Bulletin Boards
EXAMPLES OF E-
COMMERCE
 An individual purchases a book on the Internet
 A business calls a toll free number and orders a

computer using the seller's interactive telephone

system.
 A business buys office supplies on-line or through an

electronic auction.
 A manufacturing plant orders electronic components

from another plant within the company using the

company's intranet
Cont.
 An individual withdraws funds from an automatic teller
machine (ATM).
 Accepting credit cards for commercial online sales
 Driving information through a company via its intranet
 Driving manufacturing and distribution through a

value chain with partners on an extranet 

SCOPE OF E- COMMERCE
 Marketing, sales and sales promotion
 Pre-sales, subcontracts, supply.
 Financing and insurance.
 Commercial transactions – ordering, delivery, payment.
 Product service and maintenance
 Business-to-administrations
 Transport and logistics.
 Automatic trading of digital goods like games, learning
material, songs and music etc.
 Accounting and financial management.
 Legal advice
ACTIVITES OF E-
COMMERCE
 Buying and selling product online.
 Online ticketing.
 Online Payment.
 Paying different taxes.
 Online accounting software.
 Online customer support.
BENEFITS OF E-
COMMERCE
BENEFITS TO ORGANIZATION
 Market expansion to national and international markets
 Reduced cost of creating, processing, distributing,

storing and retrieving paper based information

 Reduced inventories.(Just-in –time manufacturing)
 Automated business processing
 Cost-effective document transfer
Cont.
 Reduced time to complete business transactions, speed-
up the delivery time
 Improved customer service.
 Increased productivity
 Reduced transportation Costs
BENEFITS TO CONSUMERS
 Transactions can be done 24 hrs a day, all year round
and from any location
 Customer has more choices
 Rapid inter-personal communications and information

accesses
 Wider access to assistance and to advice from experts
 Save shopping time and money
 Fast services and delivery
BENEFITS TO SOCIETY
 Helps government to deliver public services such as
healthcare, education, social services at a reduced cost
and improved manner.
 Enables rural areas to access services and products

which are otherwise not available to them.

 It helps in reducing the cost so that less affluent people

can also afford the products.

 Customers need not to travel for purchasing a product.
DISADVANTAGES :
TECHNICAL
 There can be lack of system security, reliability or
standards owning to poor implementation.
 In many countries, network bandwidth might cause an

issue.
 The software development industry is still evolving and

keeps changing rapidly.

 Sometimes it becomes difficult to integrate an e-

commerce software or website with existing

applications or databases.
Cont.
 There could be software/ hardware compatibility
issues, as some e-commerce software may be
incompatible with some operating system or any other
component.
NON TECHNICAL
DISADVANTAGES
 INITIAL COST- The initial cost of creating an e-
commerce application in house may be very high.
There could be delay in launching an e-commerce
application due to mistakes and lack of experience.
 USER RESISTANCS- Users may not trust the site

being an unknown faceless seller. Such mistrust makes

it difficult to convenience traditional users to switch
from physical stores to online/ virtual stores.
 SECURITY/PRICACY- It is quite difficult to ensure

the security or privacy of online transactions

 Lack of touch or feel of products during online
shopping is a drawback.
 Internet access is still not cheaper and is inconvenient

to use for many potential customers, those living in

remote villages.
E-COMMERCE OPPURTUNITIES
FOR INDUSTRIES
 FINANCIAL SERVICES- A large number of users
use the internet for some form of financial guidance.
 STOCK TRADING- It is one of the most common e-

commerce utilities.
 BANKING- Internet banking is rapidly growing and

there are n numbers of banks dealing in it.

 TOURS AND TRAVELS- There has been growing

emphasis on the search for alternative distribution

channels within the sector. (E.g. Indigo, SpiceJet)
COMPONENTS OF E-COMMERCE
 SUPPLIER AND SUPPLY CHAIN
MANAGEMENT
 An e-commerce business requires enough and the right

merchandise suppliers
 Supplier should be financially and operational safe
 they should be able to provide real-time stock

inventory
 they should be able to deliver purchased products fast
 Amazon, for example, relies heavily on its

marketplace partners to increase listed products

number, without buying stocks for those products.
WAREHOUSE OPERATIONS
 You would be needing a place to store your products.
 Small business can store products can home but big

established business needs a place to store.

 Not only just storing the products is enough effective

management of stored resources is required.

CUSTOMER ENGAGEMENT
 A good first impression is important in turning
potential customers(viewers) into actual customers.
 It is a representation of your online presence, so you

will need originality in your website.

 Investing in the greatest design for your website can

leave a lasting impression, and ensuring that it is easy

to navigate may provide customers with a satisfying
experience
SHIPPING AND RETURNS
 Products are required to be delivered out in the real
world on time
 And an e commerce business should also handles the

return if customer is dissatisfied.

 Usually shipping is handled by a third party
E-COMMERCE
APPLICATIONS
 Electronic markets – here the buyer is presented a
range of products and services available in a market so
that they can compare prices and make the purchase
 Electronic Data Interchange – this is a standardized

system where computers communicate with one

another without printed documents like order forms or
invoices; it eliminates delays and errors otherwise seen
when paper handling is involved
 Internet Commerce – the one we are most familiar
with; the medium used to advertise, and sell
innumerable products and services; the purchased
goods are then shipped to the buyer.
E- COMMERCE BUSINESS
MODELS
 Every business operates on business model of its own.
 Business model defines how a company runs its

operations & generates revenue

 Selecting an ecommerce business model is a challenge,

especially for beginners who have little to no

experience in the industry.
 If a business model is successfully executed, an

ecommerce venture can become a significant source of

income
PARTICIPANTS GROUP IN E-
COMMERCE
 Electronic commerce can occur within three basic
participant group.
 They are Business, Customer and Government.
 Within these board categories, there are number of

variations, in the way the models are implemented.

BUSINESS MODELS
 Business - to - Business (B2B)
 Business - to - Consumer (B2C)
 Consumer - to - Consumer (C2C)
 Consumer - to - Business (C2B)
 Business - to - Government (B2G)
 Government - to - Consumer(G2C)
 It is the business transaction that take place online.
 In this segment the entire range of activities like

marketing, order processing, and fulfillment, inventory

valuation, material management, payment processing,
financial reporting and taxation etc can be carried out
using internet and internet based technologies.
BUSINESS –TO-BUSINESS
 It is also known as B2B.
 It is the largest form of e-commerce involving business

of trillions of dollars.
 In this form both the participants are business entities ,

the buyer and seller are both business entitles and don’t
not involve an individual consumer.
 It is like the manufacturer supplying goods to the

retailer or wholesaler.
Example of B2B
 Indiamart is one of the best examples of B2B e-
commerce business. The channel focuses on providing
a platform to Small & Medium Enterprises (SMEs),
Large enterprises as well as individuals.
BUSINESS TO CONSUMERS
 It is also known as B2C
 It is the model involving businesses and consumers.
 This is the most common e- business segment.
 In this model online businesses sell to individual

consumers.
 When B2C initially started it had a small share in the

market but after 1995 its growth was exponential.

 The basic online concept behind it is retailers and

marketers can sell their products to online consumer by

using crystal clear data which is made available online
 In e-commerce, there are five different B2C business
models: direct sellers, online intermediaries,
advertising-based, community-based, and fee-based.

 Direct selling is the most common model. It is when

consumers buy products from online retailers.
 Online intermediaries are online businesses that bring

sellers and consumers together and take a cut of each

transaction made.
 In the advertising-based model, information is given
away for free and money is made from advertising on
the site.
 Facebook is an example of a community-based site

that makes money from targeting ads to users based on

their demographics and location.
 Finally, the fee-based model involves companies that

sell information or entertainment to consumers for a

fee, like Netflix or subscription-based newspapers.
 In recent years, online B2C sales have been trending
upward. Many traditional retailers have either been
closing, or adding in digital channels to their strategy
as shoppers go online for the things they need.
 This hybrid approach is when companies have both a

traditional physical presence and an online shopping

platform
CONSUMER TO CONSUMER
 It is also known as C2C.
 It involves the electronic facilitated transactions

between consumers through some third party.

 Consumer to consumer transaction is where in

customer trade within themselves through auctions.

 The auctions sites are where sellers can place their

products for sale and buyers can bid for them.

 Both sellers and buyers need to be registered with the

auction sites.
 While the sellers need to pay a fixed fee to sell their
products, the buyers can bid without a fee.
 These ecommerce marketplaces allow smaller

businesses, or even hobbyists, to sell their products at

their own pricing without having to maintain their own
online storefront.
 These sites or third party are generally intermediaries,

just there to match consumers. They do not check

quality of products offered.
EXAMPLES OF C2C
 E-BAY
 Carglist
 Auction India
 Napster
 OLX
CONSUMER TO BUSINESS
 Also known as C2B
 In the C2B ecommerce business model, individuals sell

goods and services directly to companies. We see this

most commonly in websites that allow individuals
(contractors or freelancers) to share work or services
they’re skilled in.
 Often, businesses will put in a request or a bid for that

person’s time and will pay the person through that

platform.
 One of the most recognizable examples of a C2B
business is Upwork, a freelancing platform that
connects organizations directly with talent.
 It gives businesses the ability to find and source

project support, ranging anything from software

development and content creation to UX design and
even financial needs for things like bookkeeping or
filing tax returns.
 One of the key benefits of this business model is that it
allows consumers to set their own price and can also
often help expand their individual reach by giving the
more visibility.
BUSINESS TO
GOVERNMENT
 Business to government (B2G) is when a company
markets its products and services directly to a
government agency.
 This agency could be a local, county, state, or federal

agency.
 It is also know as Public Sector Marketing that refers

marketing products and services to government agencies.

 An example of a B2G relationship is when an

ammunition manufacturer sells ammunition to the US

Army.
 And an example of a local B2G relationship is when
a private engineering company sells its engineering
services to a county government to develop a new
water and sewer system for the community.
 In B2G, companies typically bid on projects when

governments announce Requests for Proposals

(RFPs)
 Interacting with government agencies is very

different from working with other businesses or

consumers.
 Due to having to deal with bureaucracies, business
deals tend to move at a much slower pace than in other
sectors.
 B2G Networks allow businesses to bid on Government

Request for Proposal (RFP)

 A local government agency could, for example, place

an order directly from an eCommerce company for a

part to repair a piece of equipment. It depends on a
variety of factors including the size of the agency and
the need.
GOVERNMENT TO
CONSUMER
 It is online non commercial interaction between
Government and consumer instead of the commercial
business sector G2B.
 Government sector becomes visibly open to the public

domain via web portal.

 This web portal is a Government Gateway.
 Through interactive G2C services, citizens can engage in

dialogue with governments and send inquiries, problems,

comments, or service requests to specific agencies.
Citizens also can access forms, applications, and
databases.
CONSUMER TO
GOVERNMENT
 It refers to transactions conducted online between
consumers and public administration or government
bodies.
 Also called consumer-to-administration commerce.
 An example of C2G e-commerce includes making

online payments through a government website for

things like electricity, health insurance or taxes.
 Example - Urjas app for electricity bill payment
C2G
 Builds relationship between citizens and government
 Offers people a way to communicate with public

sectors
 Efficient and effective transactions
 Gives public administration flexibility
 Encourages public knowledge of technology
How to choose your e-commerce
model
 1.Understand your customer.
 Who are they?
 What are their buying habits and purchasing behaviors?
 What are their pain points?
 Building your ideal customer profile (ICP) with this

information is a great first step in choosing the right

ecommerce business model.
Understand your value
proposition
 What makes you different and in what areas do you
exceed compared to the competition?
 Is it your pricing, customer service, product selection?
 Also ask yourself, “What do you not do well?
 Knowing where you excel and when you’re not a good

fit is vital to your business strategy, and being honest

about it with potential customers will only built trust
and brand loyalty.
Sell your product in a way that makes
sense for your customers
 This is where you choose your delivery method.
 A good way to look at this is from the point of view of

a manufacturer versus a distributor.

 If you create your own products then you’ll probably

want to consider wholesale or a subscription service.

 If you’re selling someone else's goods, you’ll need to

focus more on building your brand and customer base

SRATEGY BEHIND E-COMMERCE

 The e-Commerce market depends on mainly 3

dominant elements:
 Market Requirements
 Target Customer Market
 Frequent Trends in the Industry
 1.Analysis: Analyze the statistics and current trends in the
business in the niche. Gathering as much as possible data
regarding a particular industry .It should be more specific to
the point to make perfect decisions.

 Understanding Consumer Data :Setting demography

always betters the business. Find out the geography,
economy, particulars of potential customers. Frequently keep
a check and maintain a data record on consumer surveys,
consumer reports, and social media audiences.
 Research: Research is the best way to improve
business. There are a lot of competitors and a slight fall
indicates serious weakness in the market. Research
about the competitors, regarding their dominance, their
strength, and weakness, their business goals, insights,
E-Commerce Research and Analytic
Applications

 Analytics plays a vital role in the development of e-

commerce which decides everything
 Analytic tools differ with their accessibility, price,

complexity, etc. there are various e-commerce tools

available that depict your data the way you wanted it to
look and help you get more customers independent of
organic traffic, social media, or email marketing.
 Ecommerce market research is just gathering

information to analyze what your potential customer

exactly needs.
 Research gives an idea of the quantitative and
qualitative notions behind why people buy a particular
product or service.
ANALYTICAL TOOLS
 Google Analytics
 Google analytics could inform you about how many

visitors arrive at your website daily, at what location,

and through which device
 Whatever the product is, you need to increase the e-

commerce conversion rate. It is more powerful and

preferred than any other analytic tool as it allows you
to track your website traffic at every stage.
KISSMETRICS
 This is an ideal analytic tool that enables brands to
remarket into a large audience focusing on individual
visitors rather than in general traffic
 Kissmetrics is intended for large scale marketers

wanting more advanced and deep reports.

 It allows you to know the count of visitors, about how

many times a specific visitor checked in and how

frequently they landed on a product page, etc.