Introduction to E-commerce

Definitions: What is e-commerce?

Major types of e-commerce
E-commerce: Then and now
EC evolution
EC forecast
Benefits and limitations of E-commerce
eadin!s:
Te"t#oo$ % Chapter &
What is e-commerce?
E-business?
E-commerce
The use of the Internet and the Web to transact
business, i.e. digitally enabled commercial
transactions between and among organizations
and individuals.
E-business
Digital enablement of transactions and processes
within a firm, involving information systems under
the control of the firm.
EC definitions
Why Study E-commerce?
E-commerce technology is different, more
powerful than previous technologies
E-commerce bringing fundamental changes to
commerce
Traditional commerce:
Passive consumer
Sales-force driven
Fixed prices
nformation asymmetry
E! definitions
Keep in mind when studying
IT1004 .
Are there really NEW concepts in e-commerce
vs traditional commerce?
Is this an old concept in new packaging?
Is this an old concept with a new twist?
Is this a brand new concept?
What is the implication? The impact?
8 Unique features of E-
commerce technologies
5
EC Technology Features
(Read on your own)
EC definitions
EC tech dimension Business Significance
Ubiquity Extension of mktplace beyond traditional boundaries.
Marketplace is no longer restricted to a physical space
Global
reach
Commerce enabled across cultural and national boundaries
seamlessly and ithout modification
Uni!ersal stds "ne set of technical media standards across the globe
#ichness $ideo% audio% text messages integrated into a single
marketing message and consuming experience
&nteracti!ity Consumers are engaged in a dialog that dynamically ad'usts
the experience of users. Consumers are co(participant in the
process of deli!ering goods to market
&nfo density &nformation is cheap% plentiful and accurate
)ersonali*ation )ersonali*ation of marketing messages and customi*ation of
products+ser!ices based on indi!idual characteristics
Social technology &nternet social , business models enable user content
creation and distribution and support social netork
Web 2.0
User-centered applications and social media
technologies
create, edit, and distribute content
share preferences, bookmarks, and online personas
participate in virtual lives
Build online communities
Examples
YouTube, Photobucket, nstagram
!acebook, "inkedn, Tumblr
T#itter,
$ikipedia
E% definitions
Characteristics of Web 2.0
applications
User-created/consumer-generated content
E.g. blogs, home-made videos, facebook widgets
Easy search capability
High interactive, connecting to people
E.g. facebook friend finders, games etc.
Attract etremely large audience
!n" How can companies harness these #ualities of $eb
%.& applications to their benefit'
E( definitions
Major Types of E-commerce
Classified by relationship
Business-to-Consumers (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
E-Government
Classified by technology
Peer-to-Peer (P2P)
M-Commerce
ypes of EC
E-commerce: Brief History
19952000: Innovation
Key concepts developed
Dot-coms; heavy venture capital investment
20012006: onsolidation
!mphasis on "usiness-driven approach
2006#resent: $einvention
!%tension o& technolo'ies
(e) models "ased on user-'enerated content* social
net)or+s* services
EC 1995-2000: Innovation
For computer scientists
Inexpensive, universal communications and computing
environment accessible by all
For economists:
Nearly perfect competitive market;
friction-free commerce
Lowered searc costs, disintermediation, price transparency,
elimination of unfair competitive advantage
For entrepreneurs
!xtraordinary opportunity to earn far above normal returns on
investment"first mover advantage
#onclusion:
$isions of profiting from new tec, acieving very ig market
visibility% &ource of finance ' venture capital funds
(econstruction and disintermediation
!#: )en and now
EC 2000-2006:
Consolidation
&ift of focus from tecnology driven to business
driven
)raditional firms learn to use te *eb to strengten
teir market position and brand extension%
#apital market sun start-ups and return to more
traditional bank financing based on profitability
returned%
!#: )en and now
EC 2007 - Future:
Re-invention
+ise of new business models based on
consumer-generated content, social networking
and virtual online lives%
!#: )en and now
E-commerce: Then vs
Now
!#: )en and now
1995-2000 2000-2006 2007-future
)ec-driven ,usiness driven #ommunity driven
+evenue growt
empasis
!arnings and profits
empasis
-udience . social network growt
empasis
$enture capital
financing
)raditional financing !arly small buyouts by large online
players
/ngoverned &tronger regulation and
governance
!xtensive government surveillance
!ntrepreneurial Large traditional firms Large pure web-based firms
(isinterme-
diation
&trengten
intermediaries
&mall online intermediaries renting bi0
processes of larger firms
1erfect market Imperfect mkt, brands
. network effects
2arket imperfection
1ure online
strategies
2ixed bricks and clicks
strategies
+eturn of pure online strategies in new
mkts; bricks and clicks in traditional mkt
First-mover adv &trategic follower
strengt
First mover adv in new markets
Assessing E-commerce:
Successes, Surprises & Failures
&tunning tecnological success
- mixed success from business perspective
2any early visions not fulfilled
Friction-free commerce
Consumers less price sensitive
Considerable price dispersion
Perfect competition
Information asymmetries persist
Intermediaries have not disappeared
First mover advantage
Fast-followers often overtake first movers
!#: )en and now
34
What does the future hold?
)ecnology will propagate troug all commercial activity
!-commerce margins and profits will rise to levels more
typical of all retailers
#ast of players will cange
Traditional Fortune 500 companies will play dominant
role
New startup ventures will emerge with new products,
services
Number of successful pure online stores will remain
smaller tan integrated offline5online stores
+egulatory activity worldwide will grow
Benefits of E-commerce
,enefit to 6rgani0ation
!xpands te market place
&ignificant cost savings
Improves business organi0ation and processes
1romotes interactivity wit customers and business
partners
,enefits5Limitations
Benefits of E-commerce
,enefits to customers
#onvenience, speed and cost
#onsumer empowerment
,uy customi0ed products and personali0ed services
at reasonable costs
Improved interactions wit mercants and oter
customers
,enefits5Limitations
Benefits of E-commerce
Benefits to society
Enables more individuals to work at home, and to do
less traveling for shopping, resulting in less traffic on
the roads, and lower air pollution
Allows some merchandise to be sold at lower prices
benefiting less affluent people
Facilitates delivery of public services at a reduced
cost, increases effectiveness, and/or improves
quality
Helping the handicapped
http//www!youtube!com/watch"v#k$i%&%'a(E)*fea
ture#related
Benefits/+imitations
Telecommuting
About 37 percent of US companies have adopted some kind of
flexible work arrangement, growing by 11 each year!
"n#office employees
took less satisfaction in their $obs and felt less of a
relationship and obligation to their company
disappointed at having fewer and weaker relationships!
frustrated at a perceived increase in workload and
difficulties that telecommuting can present to finishing
pro$ects and building strong working relationships!
Suggestions to mitigate this problem
%ead the article
Source& http&''arstechnica!com'news!ars'post'())*)113#study#telecommuting#makes#work#worse#for#non#
telecommuters!html
+enefits',imitations
Limitations of E-commerce
Technical limitations
Systems security and reliability continues to be a
challenge
Insufficient telecommunication bandwidth (certain
parts of the world)
Software development tools and standards are still
evolving
Integration issues with existing applications and
databases
Problems of interoperability and compatibility across
platforms and applications
Benefits!imitations
Limitations of E-commerce
"onsumer and social factors #
$xpensive technology
Sophisticated s%ill set
Security and Privacy
!ac% of touch and feel online
&nresolved legal issues
Persistent global ine'uality limiting access to
(or% ethics
Benefits!imitations
Limitations of E-commerce
Work ethics??
CyberSource found that the peak shopping hour on a recent
high-volume week (December 3 through December ! during
the critical online holiday shopping season" was # pm $acific
time (% pm &astern time" 'work hours by anyone(s definition)
*n the other hand! online transactions hit their low point
between the hours of ## pm and % am $acific time (+ am and
, am &astern time") -fter that! as employees began going in
to work on the &ast Coast and then across the nation!
shopping volumes also began climbing to their midday peak)
.he survey found a marked difference between workdays and
weekends! too) .he highest-volume online shopping days
were /onday and .uesday! while Saturday and Sunday had
the lowest volumes)
0enefits12imitations
Source3 http311www)emarketer)com1-rticle)asp4?#55%3,67src8article9head9sitesearch
+%
Wed 4pm peak online
shopping time
:nternet shopping is ,; per cent higher at %pm on Wednesdays
compared to the <uietest times of the working week! research
has found)
-fternoons are the most popular time to buy online) /any
workers appear to combat the post-lunch slump by logging on to
shop) .he number of online shoppers is ## per cent higher at
+pm compared to midday)
$re-/onday work blues means that Sunday night is also one of
the most popular times for web shopping! with a +, per cent
increase over Saturday night! which is the least popular time of
the week)
Source3 http311www)dailymail)co)uk1femail1article-#35;==#1Wednesday-%pm->esearch-shows-peak-time-online-shopping-
work)html
+;
Read on your own
?istory of e-commerce
@rowth of the :nternet and the web
*rigins of e-commerce
.echnology and e-commerce in perspective
$rediction for the future
&-commerce organiAation themes
+6
Interesting References
?istory of the :nternet (Bideo clips"
http311www)youtube)com1watch?v8r>pcSCck%wo7feat
ure8related