CHAPTER 2
Presented By:
Raghda Essam
Dina El-Haddad
Samar El-Haddad
Menna Hatem
E-Marketplaces: Structures, Mechanisms and Impacts
Agenda
Introduction
E-Marketplaces and Its components
Transaction, Electronic Catalogs in E-Commerce
Online Auction, Bartering and Negotiating
E-Commerce in wireless environment
Competition in digital Economy and its impact on
Industries and business organization
Introduction
Electronic markets play a central role in the
economy, facilitating the exchange of information,
goods, services and payments.
In the process, they create economic value for
buyers, sellers, markets intermediaries, and for the
society at large
What is Electronic Markets?
E-Marketplace is a virtual marketplace in which sellers
and buyers meet and conduct different types of
transaction.
E-Market functions are the same as that of a physical
marketplace
However computerized systems tend to make markets
much more efficient by providing more updated
information to buyers and sellers with your content.
E-Marketplace Components and participants
The major components and players in market space are:
Customers
Sellers
Product and services
Physical products
Digital products
Infrastructure
Front end
Back end
Intermediaries
Other business partners and Support services
Types of E-Marketplaces: From Storefronts to
Portals
The major B2C e-marketplaces are storefronts and
internet malls.
Electronic storefronts
An electronic store refers to a single company’s Web
site where products and services are sold, it may
belong to a manufacturer, retailer, individuals selling
from home or another type of business
Cont’d
Electronic Malls
An online shopping center where many stores are
located.
Consumers can shop in electronic malls (e-malls) similar
to malls in the physical world.
When a consumer indicates the category he/she is
interested in, the consumer is transferred to the
appropriate independent storefront
Types of Stores and Malls
General stores/ malls
Theseare large market spaces that sell all types of
products.
Specialized stores/ malls
These sell only one or few types of products.
Regional versus global stores
Some stores that serve customers that live nearby.
Transaction, Electronic Catalogs in E-Commerce
What is going on in these markets ?!
The Major EC activity is Electronic Trading (A seller
sells to customers, the sellers itself buys from
suppliers)
E-procurment
Buys materials, products, and so on from suppliers,
distributors(B2B),or from the government(G2B)
Intermediaries Roles
Intermediaries play an important role in commerce
by providing value-added activates and services
There are many types of intermediaries, Most well-
known in physical world (Wholesalers, retailers)
In Cyberspace , There are also electronic
Intermediaries known as infomediaries
Infomediaries Provieds and/or Control information
flow in cyberspace (Aggregating information and
selling it to others)
Brokers
A broker is a company that facilitates transactions
between buyers and sellers.
Different types of brokers
• Buy/sell fulfillment
Coporation that helps consumers place buy and sell on
(eTrade)
• Virtual mall
Company that helps consumers buy from a variety of
stores (Yahoo Stores)
Cont’d
• Metamediary
Firm that offers customers access to variety of stores
with transaction services such as financial services
(Amazon)
• Search Agent
Company that help consumers compare different
stores ([Link])
Intermediation Is Needed
Producers and consumers may interact directly
Direct interactions are sometimes undesirable or
unfeasible
Intermediaries whether human or electronic can address
the following five important limitations
• Search cost
• Lack of privacy
• Incomplete information
• Contract risk
• Pricing inefficiencies
E-Distributor
E-Distributor
An e-commerce intermediary that connects
manufacturers with business buyers by aggregating
the catalogs of many manufacturers in one place
Usually provide two types of services
• Relevant information about demand, supply ,prices,
and requirements
• Offer value-added services such as transfer of
products, consulting, ..
Market Mechanisms
To enable selling online, a web site usually needs EC
merchant server software , the basic functionality offered by
such software includes electronic catalogs, search engines,
and shopping carts
Electronic Catalogs
The Presentation of product in an electronic form; the
backbone of most e-selling sites
Electronic Catalogs can be classified according to three
dimensions
• Dynamics of information
• Degree of customization
• Integration with business process
Cont’d
Search Engine
A computer program that can access database of internet resources ,
search for specific information or key words, and report the result
Software(Intelligent) agent
Software that can perform routine tasks that requrie intelligence
Electronic Shopping Cart
An Order-Processing technology that allows customers to accumulate
items they wish to buy while they continue to shop
Online Auction
Auctions as EC market mechanisms
What is auction?
Auction is a market mechanisms where prices are
determined dynamically by bids.
Auctions can be done online or offline
Actions can be conducted either in public auctions sites
like eBay for example or done by invitations to private
auctions.
Online Auction
traditional versus E-auction
Traditional auction E-auction
Traditional or physical auctions are still E-auction : an auction
very popular although E-auction have
increase rabidly . conducted online
Traditional offline auction have a lot of It provide the services in low
limitations like they last only few minutes costs and with wide array,
or even seconds, the rapid process may
give buyer little time to took decision every one can join individuals
either to bid or not and so the sellers may and corporations
loss a chance of getting the highs price,
bidder may not get what the really it started over the LAN in
want(cant examine), bidder have 1980s and over the internet in
difficulty of knowing the locations and
timing of auctions and also sellers 1995.
sometimes have difficulty moving goods
and commissions are so high because of Normally consumer goods
renting places and advertising. are not suitable for E-auctions
Online Auction
Dynamic Pricing
dynamic pricing is the change in the price
depending on the supply and demand relationships
at any given time.
The main major characteristic of an auction is that
they are based on dynamic pricing.
Prices keep fluctuate basing on the supply and
demand processed unlike catalog prices which is
fixed like in stores and supermarkets
Online Auction
Type of auctions
One buyer, One seller
Negations can be done and the resulting price is determined
by both of seller and buyer.
One Seller, Many Potential buyers
The seller uses the forward auction in which the seller
entertains bid for buyers bidders increase price
sequentially.
Online Auction
Type of auctions
One buyer, Many potential sellers
Two types of auctions can be done in such case:
Reverse auction(bidding or tendering system) in which the buyer
place an item for bid and sellers bid on the job in which the price
keep reducing and the lowest bid win.
“name-your-own-price” model in which a buyer specifies the
price and other terms that he is willing to pay and any willing
seller could accept it.
Many sellers, Many buyers
When there are many sellers and buyers so buyers and
their bidding prices are matched with sellers and their
asking prices and this case is could double auctions
Online Auction
benefits and limitations of E-auctions
Benefits of E-auctions
Opportunity of getting higher prices for a seller Ruther than fixed one’s
Can liquidate large quantities quickly
Opportunity to find unique items for a buyer
Increase customer relationship and loyalty (in case of specialist B2B
auctions sites)
Limitations of E-auctions
Minimal of security: some websites are not secured enough.
Possibility of fraud: auctions items in many cases are uniqe and here
buyers can’t see or examine items.
Limited participation: some auctions are by invations only and so a lot of
dealers don’t have the same opportunity of large pool of buyers
Bartering and Negotiating Online
Online Bartering
Bartering is the process of exchange goods and
services.
The problem with bartering is that it is difficult of find
trading partner, and that’s why they use classified ads
to advertise what they need and what they offer and
intermediary helps but they take almost 20-30 %
commission.
E-bartering is the bartering conducted online usually in
a bartering exchange.
Bartering exchange is a marketplace in which an
intermediary arranges barter transactions.
Bartering and Negotiating Online
Online Negotiation
Dynamic prices can also determined by negotiations. its
interaction between seller and buyer
Negations pricing are commonly used for expensive and
specialized products and large quantities.
its well known in offline world (e.g. in real estate,
automobile purchases and contract work)
According to choi and whinston (2000) that online
negotiation is easier than offline one.
Three factors facilitate the online negotiations :
The products and services that are customized
Computers technology that facilitates the negotiation process
soft wares that search and match needs and provides quality
customer serves and base where prices can be negotiate
E-Commerce in Wireless Environment
Due to widespread adoption of wireless and mobile
networks, mobile computing became more possible.
We have:
- Mobile Commerce (m-commerce/m-business): refers
to conduct of e-commerce via wireless device.
- Location-based Commerce (L-commerce): is m-
commerce targeted to customer whose preference
and needs and location (using GPS) are known.
Mobile Portals
DoCoMo’s i-mode: world’s largest mobile portal,
users can conduct large variety of m-commerce
applications:
a) Shopping guides: number of phones and addresses
b) Maps & Transportation: digital maps for routes
c) Ticketing: airline tickets
d) News & exports: fast access to global news
Competition in digital Economy
Competitive factors:
a) Lower search costs for buyers
b) Speedy comparisons
c) Lower prices
d) Customer service
e) Differentiation & Personalization
Porter’s competitive analysis in industry
Impact of EC on Business Process
Web technologies are offering organizations to re-
think strategic business models, processes,
relationships (called e-opportunities ) consists of:
a) E-Marketing: Improve marketing of existing
products
b) E- Operations: Improve marketing of existing
products
c) E- Services: Improve marketing of existing
products
Questions
Thank you