CSIT118 · IT Applications in Business
CSIT118 · IT APPLICATIONS IN BUSINESS
Module III: E-Commerce — Class Notes
Buying, selling, and running business electronically — models, technology, payments, and the issues that
come with it.
1. What is E-Commerce?
E-commerce is the buying and selling of goods and services through electronic networks, primarily the
internet. It covers transactions between businesses and consumers, and between businesses themselves,
breaking down the geographical and time barriers that once limited trade — an online store never really
closes.
– E-commerce adoption accelerated sharply during COVID-19 and has not slowed down since.
– It empowers even small, local businesses to compete on a global stage without needing a physical storefront
in every market.
2. E-Commerce vs. E-Business
These two terms are often used interchangeably, but they mean different things.
– E-Commerce: specifically refers to buying and selling online — B2B, B2C, and C2C transactions through
online platforms.
– E-Business: is the broader term, covering all online business activity — including CRM, ERP, supply chain
management, and HR, not just sales.
3. Advantages & Disadvantages — The Customer’s Point of View
– Advantages: shop anytime, anywhere; easy price comparison across sellers; wide product variety;
personalised recommendations.
– Disadvantages: no physical interaction with the product before buying; data and privacy risk; delivery
delays; can be harder for some demographics (e.g. less tech-comfortable users) to navigate.
4. Advantages & Disadvantages — The Organisation’s Point of View
– Advantages: access to a global market; 24/7 sales without extra staffing; lower operational costs than
physical retail; stronger, data-driven customer engagement.
– Disadvantages: cybersecurity risk; intense price competition; dependency on third-party platforms (e.g.
marketplace fees); significant setup and running costs for technology.
5. E-Commerce Transaction Models
Transaction models describe who is trading with whom.
– B2B (Business to Business): e.g. a manufacturer selling raw materials or parts to another company.
– B2C (Business to Consumer): e.g. an online store selling directly to individual shoppers.
– C2C (Consumer to Consumer): e.g. an online marketplace connecting individual buyers and sellers directly.
– G2C (Government to Consumer): e.g. paying taxes or utility fees through a government portal.
6. E-Commerce Business Models
Business models describe how a company actually earns revenue online.
– Direct Sales: selling straight to the consumer with no middleman.
– Subscription: a recurring fee for ongoing access — e.g. Netflix.
– Marketplace: connects buyers and sellers on one platform and takes a transaction fee — e.g. Amazon
Marketplace, Etsy.
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CSIT118 · IT Applications in Business
– Freemium: a free basic tier, with paid premium features for those who want more.
– Affiliate: earns a commission for referring customers to another business’s products.
7. Technologies Reshaping E-Commerce
– AI & Machine Learning: power chatbots, personalised recommendations, dynamic pricing, and fraud
detection.
– AR & VR: enable virtual try-ons and virtual showrooms, which reduce product returns and boost buyer
confidence.
– Mobile Commerce: shopping through phones and app-like Progressive Web Apps (PWAs) that work across
devices.
– Voice Commerce: making purchases through voice assistants and smart home devices.
8. Hosting an E-Commerce Site
Before a business can sell online, it needs to plan and build its web presence.
– Planning involves choosing a hosting model (self-hosted vs. platform-hosted, e.g. Shopify), estimating traffic,
and designing for security from day one.
– Constructing the site involves web design, integrating a shopping cart and payment gateway, and ensuring
the site works well on mobile devices.
9. Electronic Payment Systems
– Cards: credit and debit cards remain the most widely used payment method globally.
– Digital Wallets: PayPal, Google Pay, Apple Pay — fast, app-based checkout that reduces friction.
– Buy Now, Pay Later (BNPL): installment-based payment options that have been shown to boost conversion
rates.
– Cryptocurrency: a growing but still niche option, accepted on select platforms.
10. E-Core Values — Ethics, Legal, Tax & Security Issues
Running an e-commerce business responsibly means addressing several governance areas at once.
– Customer-centricity and transparency: clear pricing, shipping timelines, and return policies build long-term
trust.
– Data privacy and security must be designed into the platform from the start, not added as an afterthought.
– International sales raise cross-border taxation and legal compliance questions (e.g. GST across Indian states,
customs for exports).
– Regular security audits are essential to protect against breaches, payment fraud, and the resulting
reputational damage.
CASE FOR DISCUSSION
How should a small online seller in India handle GST obligations when selling to customers across multiple
states?
Key Terms to Remember
– E-Commerce vs E-Business — E-commerce is buying/selling online; e-business is all online business activity.
– B2B / B2C / C2C / G2C — transaction models describing who is trading with whom.
– BNPL — Buy Now, Pay Later; an installment-based payment option.
– Marketplace model — a platform connecting buyers and sellers, earning a transaction fee.
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