UNIT-I

INTRODUCTION
1.E-Commerce: Meaning - Advantages & Limitations.
2.E-Business: Traditional & Contemporary Model,
[Link] of E-Commerce on Business Models,
[Link] of E-Commerce: B2B - B2C - C2B - C2C - B2E –
[Link] of Ecommerce:
E-Commerce Organization Applications –
E-Marketing – E-Advertising –
E-Banking - Mobile Commerce(short) -
E-Trading - E-Learning - E-Shopping(short)
Essay Questions:
1. Discuss the Three pillars of E-Commerce.
2. Explain the benefits of E-commerce to the society, consumer and organizations.
3. Explain about various e-commerce models in detail.
4. Explain the difference between traditional commerce and E-commerce.
Short Questions:
1. E-shopping.
2. Mobile Commerce.
What is E-Commerce-Advantages and
Disadvantages:
E-commerce is also referred to as electronic commerce or internet commerce.
 It is the process of selling and buying goods as well as services via internet.
 Some popular e-Commerce platforms are Shopify, WooCommerce, BigCommerce, Magento, Wix, and
Squarespace.
 E-commerce can be drawn on many technologies such as mobile commerce, Internet marketing,
online transaction processing, electronic funds transfer, supply chain management, electronic data
interchange (EDI), inventory management systems, and automated data collection systems.
 E-commerce has various benefits and limitations.

Features of e-commerce
erce:
o Improved sales - E-Commerce gives a large improvement in existing sales volume. Using e-commerce,
we can generate orders and products from anytime, anywhere, without any human intervention.
o Cashless Payment - E-Commerce allows the use of electronic payment. It allows the transaction from
credit cards, debit cards, electronic fund transfer via bank's website, and other electronic payment
methods.
o 24x7 availability - E-Commerce provides 24x7 service availability. It is available anywhere,
anytime. It automates the business of enterprises and their process of providing services to their
customers.
o Advertising and Marketing - E-Commerce helps in good marketing management of products and
services. It helps to increase the reach of advertising of products and services of businesses.
o Improvement in communication- E-commerce gives faster, efficient and reliable communication
with customers and partners.
Advantages of E-commerce
 E-commerce is beneficial for organizations, society, and customers. So we can categorize its benefits
into three categories: benefits to consumers, benefits to society, and benefits to organizations.
Advantages to Consumers
There are various benefits of E-commerce to consumers that are listed as follows -
 It is also mentioned in features of e-commerce that it provides 24x7 supports to its consumers. It
provides the facility of placing orders anytime, anywhere, or from any location.
 It provides more options to its customers and gives a faster delivery of products.
 Users can select cheaper and better options via e-commerce as it provides more options to its customers.
 Before the final purchase of a product, a customer can see the reviews and comments of a particular
product and can also put their reviews and comments about a product.
  It provides the information in an easy way, i.e., the information is not hard to read. A customer can see
the detailed information of a product within some seconds instead of waiting for days.
 Because of e-commerce, the competition between the organization increases, and as a result
organization gives ample discounts to its customers.
Advantages to Society
There are various benefits of E-commerce to society that are listed as follows -
 It is majorly beneficial for reducing air pollution because e-commerce customers do not require to
travel, and as a result, there will be less traffic on the road.
 It provides the facility to rural areas to access services and products that are otherwise unavailable
to them.
 E-commerce is helpful to government in delivering the public services like education and healthcare
in a better way and at a minimal cost.

 It is beneficial to society in many ways, as it helps to reduce pollution, and other benefits include saves
time, anytime, anywhere accessibility, and many more.
Advantages of organizations
There are various benefits of E-commerce to organizations that are listed as follows -
o Using e-commerce, paperwork is reduced.
o With minimum investment, organizations can expand their business or market to national and
international levels.
o E-commerce helps to improve the company's brand image.
o It is also helpful to organizations to provide better services to their customers.
o E-commerce digitizes the information that helps to manage the paper-based information, reduce the
cost of creating processes.
o It helps to increase the productivity of organizations.
So, these are the benefits of e-commerce. Along with the above-mentioned benefits, it also has limitations. Now,
let's see the limitations of using e-commerce.
Disadvantages of E-commerce
The limitations of using e-commerce are mentioned as follows -
o As there is a requirement of the internet to use e-commerce, it is possible that the internet may be slow.
o It does not have any universal standard for reliability and quality.
o There can be compatibility issues.
o Security is another concern of using e-commerce. We have seen security breaches many times where
the customer's information got stolen. Some of the big concerns with customers include identity theft,
credit card theft, etc.
o E-commerce uses a public key that is not secure.
o Lack of feel or touch of products while purchasing them online.
o It is inconvenient to use the internet for those people who are living in remote villages, and it is still
not cheaper.
o The cost of the creation and building of an e-commerce application may be very high.
o It is hard to convince traditional users to purchase products online rather than in physical stores.
o Sometimes, there is a risk of purchasing unsatisfactory products via E-commerce.

Types of E-commerce
E-commerce is categorised into six major types they are:
1. Business-to-Business
 Business-to-business (B2B) is a situation or an activity that processed between two companies to
make a commercial transaction with one another.
 Simply, it can define commerce doing business with other companies.
 Some B2B business e-commerce includes Alibaba, Woodpecker, eWorldTrade and more.
 This kind of apps are developed by high end web development company.
2. Business-to-Consumer
 Business-to-consumer(B2C) described as a transaction directly between a business and an end consumer.
 A customer can view and choose the product shown on the website and buy product/services as by
the approval of business.
 They are known as online retailers who sell products and services online.
 One of the best online marketplace websites like amazon is an example for B2C business model.

3. Consumer-to-Consumer
 Consumer-to-consumer (C2C) transactions processed in between consumers.
 Consumer-to-consumer made a convenient way for the people who comes together to buy, sell and
trade.
 One prominent example of C2C transaction is eBay(online consumer auction site), newspaper
(online classifieds), craigslist.
 The main goal of C2C is to enable the relationship between both buyers and sellers.

 They are known as the peer-to-peer business model.

 This type of website is developed by classified app development.
 4. Consumer-to-Business
 Consumer-to-business is another transaction between consumer and business organizations.
 Here, the transaction takes place within a site in which consumers purchase a product or services,
and business bid on and purchase.
 Examples for the C2B platform is iStock, job boards.

Three pillars of E-Commerce model:

A model describes how the business elements of a business fit together, which can identify a business model as a
clarification of how an organisation works.

 Three pillars of E-Commerce model was developed by Peter Fingar, is another business model that
builds on traditional market spaces and creates an easy and flexible environment to conduct
business electronically.
 The three pillars mentioned in this model are:
a. Electronic information
b. Electronic relationship
c. Electronic transactions

Electronic information:
 Electronic information is similar to virtual information space in ICDT model.
 The WWW is viewed as a global repository of documents and multimedia data.
 Constructing an electronic information pillar is easy.
 Most word processing software packages will easily convert the documents into a web-readable format.
 Electronic information space consists of several different elements that together create a holistic
 view of the company, which are assumed to generate value for the organisation.

Electronic relationships:
 Electronic relationship is the central pillar and this is similar to virtual communication space.
 In this space customer interacts with the vendor.
 Generating value for the customers can be stated as the most vital element of the value creation of a
business model. In order for being able to give value to the customers, the company must have
identified who their customers are.
 Some additional aspects of the value creating for the customer, is to reduce potential risks in the
purchase, and to offer a product/service that is accessible by making it available for the customer, and
also to make it functional through making it easy to use.

The electronic transactions:

 The electronic transactions pillar is similar to virtual transactions space and also encompasses
virtual distribution space.
 This element identifies how a company is creating value for themselves while at the same time
providing value for the customers.
 This formula consists of a revenue model, a cost structure, marginal model, and resource velocity.
 Electronic Transaction Pillar should have
 The ability to engage in meaningful and sufficient negotiation process.
 Security of transaction data
ICDT model: [information, communication, distribution, transaction]
 A business model is a plan for the successful operation of a business, identifying sources of revenue,
the intended customer base, products, and details of financing.
 The rapid penetration of Internet allowed companies to re-discover their traditional business in to
Internet strategy of business.
 ICDT business model is proposed by Albert Angehrn and is used as a systematic framework to guide
the companies for building their business on Internet.
 ICDT business model takes its name from the four virtual spaces provided to facilitate the
exchange of goods and services through electronic channels.
 The four virtual spaces are :
1. Virtual Information Space (VIS)

2. Virtual Communication Space (VCS)

3. Virtual Distribution Space (VDS)

4. Virtual Transaction Space (VTS)

1. Virtual Information Space (VIS)

 The Virtual Information Space (VIS) consists of the new Internet-based channels through which
 companies can display information about themselves and the products and services they offer.
 The major concerns in building information space are:
1. The information that is displayed is accurate and correct.
2. The information that is displayed is only viewed by authorised users.
3. Customers can easily find the site; navigate through it once they have reached the site.
4. The site is accessible without long wait times.

2. Virtual Communication Space (VCS)

 The Virtual Communication Space (VCS) is about interaction.
 Like a café, it provides a “space” for engaging in relationship-building, exchange of
ideas or opinions.
 Members of the virtual community can communicate at high speed, low cost, and
bypass traditional physical and geographical constraints.
 The major concerns in building communication space are: Provide transparency in exchanging
ideas and sharing opinions.
Consider the ideas and suggestions of virtual community members.

3. Virtual Distribution Space (VDS)

 The Virtual Distribution Space (VDS) is about service delivery.
 This space is used to deliver the products or services requested or purchased by the consumer.
 For virtual delivery to occur, the products being delivered must be digital (software) or the
services performed digitally (online booking/brokerage/shares).
 Online news services and software companies have been quick to market and deliver
their products electronically.
 The major concerns in this space are:
1. Delivery of products and services to be done only to approved customers.
2. Reliable delivery of products and services.
4. Virtual Transaction Space (VTS)
 This space is used to initiate and execute business transactions, such as sales orders and
financial transactions
 The primary concerns in building transaction space are:
1. Security over data.
2. Accuracy and integrity of processing methods
3. Reliability of vendor
4. Reputation of trading partner
5. Privacy concerns by customers.
Impact of E-Commerce on Business Models:
 E-Commerce is about much more than buying, selling and marketing. It impacts significantly
on all the functional areas of business models for improving efficiency and performance.
 The largest and most-successful E-Commerce businesses have invested hugely over many
years to develop their IT systems, business processes and capabilities.
 Developments in E-Commerce systems have made it relatively straightforward for all
businesses to sell digitally. It can be off-the shelf software (ready-made for the customers’
need) or cloud-based services, as well as trading platforms like Amazon & Flipkart made it
easy.
 E-Commerce business models are developed to compete at any scale or complexity and to
cater organisational and customer needs. Introduction of electronic based transactions in
the business showed significant impact on already existing traditional business models.
E-COMMERCE APPLICATIONS:
 E-Marketing –
 E-Advertising –
 E-Banking –
 Mobile Commerce –
 E-Trading –
 E-Learning –
 E-Shopping

1, E-Marketing.
 E-Marketing (Electronic Marketing), also known as Internet Marketing, Web Marketing, Digital
Marketing, or Online Marketing, is marketing done through the internet on online channels.
 E-marketing is the process of marketing a product or service offering using the Internet to reach the
target audience on smartphones, devices, social media etc..
 E-marketing not only includes marketing on the Internet, but also includes marketing done via e-mail
and wireless media.
 t uses a range of technologies to help connect businesses to their customers.
E. Advertising
 Online advertising, also known as online marketing, Internet advertising, digital advertising or
web advertising, is a form of marketing and advertising which uses the Internet to deliver promotional
marketing messages to consumers.
 Online advertising is a marketing strategy that involves the use of the Internet as a medium to
obtain website traffic and target and deliver marketing messages to the right customers.
 The purpose of using electronic advertising is to reach a wider range of potential customers by
connecting with them over the web.
Ex:
 Display Ads.
 Social Media Ads.
 Search Engine Marketing.
 Native Advertising.
 Remarketing/Retargeting.
 Video Ads.
 Email Marketing.
3. E- Banking
 Internet Banking, also known as net-banking or online banking, is an electronic payment system
that enables the customer of a bank or a financial institution to make financial or non-financial
transactions online via the internet.
 It is not just convenient but also a secure method of banking. Net banking portals are secured by
unique User/Customer IDs and passwords.
Here are some of the best features of internet banking:
 Provides access to financial as well as non-financial banking services
 Facility to check bank balance any time
 Make bill payments and fund transfer to other accounts
 Keep a check on mortgages, loans, savings a/c linked to the bank account
 Safe and secure mode of banking
 Protected with unique ID and password
 Customers can apply for the issuance of a chequebook
 Buy general insurance
 Set-up or cancel automatic recurring payments and standing orders
 Keep a check on investments linked to the bank account
4. Mobile Commerce
Mobile commerce, also known as m-commerce , involves using wireless handheld devices like cell phones and
tablets to conduct commercial transactions online, including the purchase and sale of products, online banking,
and paying bills.

 Mobile commerce refers to business or purchases conducted over mobile devices like cell-phones
or tablets.
 With m-commerce, users can transact anywhere provided there's a wireless internet provider available
in that area.
 Mobile commerce has increased rapidly as security issues have been resolved.
 Companies like Apple and Google have introduced their own mobile commerce services.
5. e-Trading:
 Electronic trading, often called e-trading, is a way to buy, sell, and manage investments online.
 Early forms of electronic trading simply used computers to handle all the price and exchange
rate information, giving bulletins on price changes and new offerings at regular intervals.
 Since the emergence of the internet, however, e-trading is more often used to describe any type of
trading that occurs online through electronic brokers.
 Since its inception, e-trading has attracted millions of investors that rely on the accuracy, efficiency,
and speed of the Internet to assist with better investing strategies.
6. E-Learning :
 E-learning, also referred to as online learning or electronic learning,
 It is the acquisition of knowledge which takes place through electronic technologies and media.
 In simple language, e-learning is defined as “learning that is enabled electronically”.
 Typically, e-learning is conducted on the Internet, where students can access their learning materials
online at any place and time.
 E-Learning most often takes place in the form of online courses, online degrees, or online programs.

7. E-Shopping:
 Online shopping or e-shopping is searching for and purchasing goods and services
over the Internet through the use of a web browser.
 The main attraction of online shopping is that consumers can find and purchase items they need
(which are then shipped to their front door) without ever leaving the house.
 Today, almost anything can be purchased through online shopping, amounting to billions of dollars a
year in sales.