Chapter Eight

Basic concept of
E-commerce
1
WHAT IS COMMERCE?
? Commerce is the activity of buying
and selling of goods and services,
especially on a large scale.
? A system or environment consists of
legal, economical, political, social,
cultural and technological systems
that are in business in any country
or internationally.
? It can also be defined as a component
of business which includes all
activities, functions and institutions
involved in transferring goods from
producers to consumers.
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WHAT IS E-COMMERCE?
? It is commonly known as
electronic marketing.
? It consists of buying and
selling goods and services over
an electronic system such as
the internet.
? It also pertains to any form of
business transaction in which
the parties interact
electronically rather than by
physical exchanges or direct
physical contact.
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 WHY USE E-COMMERCE?

LOW ENTRY COST.

4
THE PROCESS OF E-COMMERCE
? A prospective consumer, who wants to buy something,
uses Web browser to connect to the home page of a
merchant's Web site through the Internet.
? The consumer browses the catalog of products
featured on the site and selects items to purchase.
? The selected items are placed in the electronic
equivalent of a shopping cart.
? When the consumer is ready to complete the purchase
of selected items, he/she provides a bill-to and ship-to
address for purchase and delivery
? When the credit/debit card number is validated and
the order is completed at the Commerce Server site,
the merchant's site displays a receipt confirming the
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customer's purchase
THE PROCESS OF E-COMMERCE
? The Commerce Server site then forwards the
order to a Processing Network for payment
processing and fulfillment.

6
DIFFERENT TYPES OF E-COMMERCE
? Business-to-business (B2B)
? Business-to-Consumer (B2C)
? Business-to-government (B2G)
? Consumer-to-consumer (C2C)
? Government to consumer (G2C)
? Government-to-business (G2B)

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WHAT IS B2B E-COMMERCE?
? B2B e-commerce is simply
defined as ecommerce
between companies
? About 80% of e-commerce is
of this type.

? Examples:
⚫ Intel selling microprocessor to
Dell
⚫ Heinz selling ketchup to
McDonalds
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WHAT IS B2C ECOMMERCE?
? Business-to-consumer
e-commerce, or commerce
between companies and
consumers, involves
customers gathering
information; purchasing
physical goods or receiving
products over an electronic
network.

? Example:
⚫ Dell selling me a laptop 9
WHAT IS B2G ECOMMERCE?
? Business-to-government
e-commerce or B2G is
generally defined as commerce
between companies and the
public sector.
? It refers to the use of the
Internet for public
procurement, licensing
procedures, and other
government related operations

? Example:
⚫ Business pay taxes, file reports,
or sell goods and services To 10
Govt. agencies
WHAT IS C2C ECOMMERCE?
? Consumer-to-consumer
e-commerce or C2C is simply
commerce between private
individuals or consumers.

? Example:
⚫ Mary buying an iPod from Tom
on eBay
⚫ Me selling a car to my neighbor

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WHAT IS G2C E-COMMERCE?
? This Model is also a part of e-governance.
? The objective of this model is to provide good and
effective services to each citizen. The Government
provides the following facilities to the citizens
through website. Information of all government
departments, Different welfare schemes, Different
application forms to be used by the citizens.
? Example:
⚫ Help Line

12
WHAT IS G2B E-COMMERCE?
? Government-to-business
(G2B) is a business model
that refers to government
providing services or
information to business
organization. Government
uses B2G model website to
approach business
organizations. Such websites
support auctions, tenders
and application submission
functionalities. 13
ADVANTAGES OF E-COMMERCE:
? Faster buying/selling procedure, as well as easy
to find products
? Buying/selling 24/7
? More reach to customers, there is no theoretical
geographic limitations
? Low operational costs and better quality of
services
? No need of physical company set-ups. Easy to
start and manage a business
? Customers can easily select products from
different providers without moving around 14
physically
DISADVANTAGES OF E-COMMERCE
? Unable to examine products personally
? Not everyone is connected to the Internet
? There is the possibility of credit card number
theft
? Mechanical failures can cause unpredictable
effects on the total processes

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BENEFITS OF E-COMMERCE
? 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
? Reduced time to complete business transactions,
speed-up the delivery time
? Improved customer service
? Increased productivity -Reduced transportation 16
Costs
IMPACT OF E-COMMERCE
? Improving Direct Marketing
? Product Promotion
? New Sales Channels
? Direct Savings and Reduced Cycle Time
? Customer Service
? Brand or Corporate Image
? Transforming Organizations
? Technology and Organizational Learning
? Changing Nature of Work
? New Product Capabilities
? New Business Models 17
Thank You
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