MODULE 1 Introduction to E-
Business and E-
Commerce
MEANING OF E-COMMERCE
E-commerce is the process of
selling goods and services online. Customers come to the
website or online marketplace and purchase products using
electronic payments. Upon receiving the money, the
merchant ships the goods or provides the service.
DEFINITION OF E-
COMMERCE
“e-commerce Production, distribution, marketing, sale or
delivery of goods and services by electronic means”.
FEATURES OF E-COMMERCE
1. Ubiquity :
E-commerce is widespread, that is, it is available everywhere always. It sets free
market from being restricted to a physical space and makes it possible to shop
from computer (such as desktop, laptop). The result is called a market space.
2. Global Reach :
E-commerce technologies enable a business to easily reach across geographic
boundaries around the earth far more conveniently and effectively as compared
to traditional commerce. Globally, companies are acquiring greater profits and
business results by expanding their business with e-commerce solutions.
3. Universal Standards :
Universal Standards are standards shared by all the nations around world. These
are technical standards of Internet for conducting e-commerce.
FEATURES OF E-COMMERCE
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4. Interactivity :
E-commerce technologies permits two-way communication between customer and
sellers which makes it interactive. It proves as significant feature of e-commerce
technology over the commercial traditional technologies of the 20th century.
5. Information Density :
Information density means total amount and quality of information available over
Internet to all market buyers and sellers. Internet vastly increases information
density. Information density offers better quality information to consumer and
merchants.
6. Richness :
Richness refers to the complexity and content of a message. Richness means all
commercial activity and experience, conducted through a variety of messages. For
example, text, pictures, videos, sound, links, SMS (Short Message Services) etc.
FEATURES OF E-COMMERCE
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7. Personalization :
E-commerce technology offers personalization. Personalization
means designing marketing messages according to particular
individuals by customizing it as per customer personal details like
name, interests, and past purchases record.
BENEFITS OF E-COMMERCE
1. Low costs
A significant advantage of ecommerce is that launching an online store is
much less costly than opening a physical store. You are not required to furnish
your outlet, nor are you required to pay rent or hire multiple workers.
Marketing and advertising campaigns are also inexpensive. Additionally, the
online portal is computerized and automated, which saves significant
money. Ex: Flip cart , Myntra etc
2. Speed & Flexibility
A person or business can easily open an ecommerce store in a matter of days.
In contrast, a physical store requires space, commercial leasing, and sufficient
construction and decoration time before opening. In an e-commerce platform,
displays and product ranges can be changed instantly, while in a physical
store, this requires careful preparation, adequate time and manpower.
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3. Faster Buying Process
Previously, a customer had to schedule his shopping trip in advance, even though he
desired to purchase a single item. This will include rearranging his schedule and
making the purchase at the store. Another vital advantage of ecommerce is that it
expedites the purchasing process.
4. Product Catalogue
Customers are looking for a detailed overview of the items they wish to purchase,
which is a critical aspect of ecommerce. An e-commerce platform provides its
customers with a product catalogue that includes data sheets that detail all of the
company’s products and services.
5. Wider Customer Base
A physical store is based in a specific location, and in most instances, residents in the
nearby area can only come to shop. Another advantage of e-commerce stores is that
they are not geographically limited.
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6. Customer Data Insights
Another benefit of online selling that you might not have considered is the
ease with which consumer data can be collected, analysed, and acted upon. If
you want to maintain a laser-like emphasis on the customer experience, you
must own the consumer data. By monitoring consumer experiences, online
selling enables you to collect first-hand data. You’ll benefit from a continuous
feedback loop of actionable insights that will allow you to reinvent the
customer experience continuously.
7. Scalability
When a physical store experiences a spike of customers, it becomes extremely
difficult to manage them due to insufficient staff. Scaling up or expanding a
physical store needs additional floor space and resources, each with a cost. In
comparison, growing an online store is extremely easy, which is one of the less
apparent advantages of e-commerce for businesses.
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8. Reviews & Ratings
Customers are encouraged to leave feedback on online stores in order to
learn about customer satisfaction and any issues they are having when using
the products and services. The availability of these reviews on ecommerce
stores allows potential buyers to learn more about the product and determine
if it is appropriate for their specific needs. It also aids sellers in improving
their services and products to increase sales and customer satisfaction.
9. Increased Profit Margin
As opposed to traditional stores, the cost of setting up and operating an
ecommerce store is very low. You’ll also save money on marketing, labour,
and overhead. Most ecommerce stores provide the dashboard with an added
benefit for reports and invoices, helping the business manage their finance.
When running an online store, inventory management costs are also reduced.
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10. Targeted Marketing
When you sell online, you won’t have to pay to reach everybody,
which is very costly. Your marketing budget would be based on
reaching out to the specific customers who are most likely to be
interested in what you’re selling and purchase your products. You
can choose who sees your ads on online advertisement platforms
based on keywords, demographic details, geographic location, and
even interests and hobbies.
DIFFERENCE BETWEEN
TRADITIONAL COMMERCE
AND E-COMMERCE :
[Link]. TRADITIONAL COMMERCE E-COMMERCE
Traditional commerce E-commerce refers to the
refers to the commercial commercial transactions
transactions or exchange or exchange of
01. of information, buying or information, buying or
selling product/services selling product/services
from person to person electronically with the
without use of internet. help of internet.
In traditional commerce it
In e-commerce it is easy
is difficult to establish and
02. to establish and maintain
maintain standard
standard practices.
practices.
In e-commerce indirect
In traditional commerce
interaction through seller
direct interaction through
03. and buyer occurs using
seller and buyer is
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Traditional commerce is E-commerce is carried out
carried out by face to face, by internet or other
04.
telephone lines or mail network communication
systems. technology.
In traditional commerce In e-commerce processing
05. processing of transaction of transaction is
is manual. automatic.
In traditional commerce
In e-commerce delivery of
06. delivery of goods is
goods takes time.
instant.
Its accessibility is
Its accessibility is for
07. 24×7×365 means round
limited time in a day.
the clock.
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Traditional commerce is E-commerce is used to
08. done where digital save valuable time and
network is not reachable. money.
Traditional commerce is a E-commerce is a newer
older method of business concept of business style
09.
style which comes under which comes under e-
traditional business. business.
Its resource focuses on Its resource focuses on
10.
supply side. demand side.
In traditional commerce In e-commerce customers
customers can inspect can not inspect products
11.
products physically before physically before
purchase. purchase.
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Its business scope of Its business scope is
12. business is a limited worldwide as it is done
physical area. through digital medium.
For customer support, For customer support,
information exchange information exchange
13.
there is no such uniform there is exists uniform
platform. platform.
BUSINESS APPLICATION
Meaning : E-business may be defined as conducting of activities of
industry, trade and commerce through the computer network. The
most common network used is the internet. Applications of e -
business are as follows : 1. E-bidding / E-auction: Many shopping
sites such as airline tickets, etc.
BENEFITS OF BUSINESS
APPLICATION
1. Quality: It ensures high quality, reliable results and stakeholders will experience
the same level of services.
2. Time Saving: Business application automation reduces the number of tasks by
doing manually, which is time consuming.
3. Reduced Turnover time: Eliminate unnecessary tasks an realign process steps
to optimize the flow of information throughout collection, billing, production etc.
4. Improved Efficiency: It ensure systems run smoothly and efficiently, but also
that errors are eliminated. The effort required to undertake it and the cost of
completing it successfully.
5. Reliability: The consistency means stakeholders can rely on business operation
and reliable services to the customers maintaining a strategic advantage.
[Link]: Automated process is controlled and consistently operates accurately
within defined timeline.
7. Reduced Costs: Automated accomplish the task more by utilizing fewer
resources.
CHALLENGES
IMPLEMENTING BUSINESS
APPLICATION
1. Business processes and tasks require high amount of computer
knowledge and therefore seek employees to use their personal
judgment and these processes are hard to encode and automate.
2. Business application required re-engineering of some business
process and requires re-engineering of some business process and
required significant amount of time to be spent at the initial stage
of implementation.
3. The staff resistance is the main problem , as the acceptance of
the implementation process is high difficult. Due to the reason the
management need greater visibility of the process and makes
decisions that to be made by the staff earlier.
4. The cost implementing is high and expensive.
ELECTRONIC COMMERCE
Meaning: "Ecommerce" or "electronic commerce" is the trading of
goods and services on the internet. It is your bustling city center or
brick-and-mortar shop translated into zeroes and ones on the
internet superhighway.
Defn: “E-Commerce is the buying and selling of products,
information and services over the internet”.
FUNCTIONS OF E-
COMMERCE
1. Communication Function: Communication to facilitate the
business transaction to the concerned department.
2. Process Management Function: The automation processes
understanding the business and improvement of business
3. Service Management Function: Application of technology to
improve the quality of services.
4. Transaction Function: The ability to buy/sell on the online
services.
NEED FOR E-COMMERCE
1. Marketing: Issues of online advertising, marketing strategies, consumer's behavior
and cultures. One of the areas in which it impacts particularly is direct marketing. In the
past this was mainly door-to-door, home parties and mail order using catalogues or
leaflets.
2. Computer Sciences: Development of different network and computing technologies
and languages to support e-commerce and e-business.
3. Production and Operations Management: The impact of on-line processing has led to
reduced cycle times. The delivery of the products and services digitized are
electronically; and the time for processing orders can be reduced. Production systems
are integrated with finance marketing and other functional systems as well as with
business partners and customers.
4. Finance and Accounting: On-line banking; issues of transaction costs; accounting and
auditing implications where, intangible, assets, capital must be tangibly valued in an
increasingly knowledge based economy.
5. Economics: The impact of e-commerce on local and global economies, understanding
the concept of a digital and knowledge-based economy and how this fits into economic
theory.
MODELS FOR E-BUSINESS
Business To Consumer (B2C)
The B2C (business-to-consumer) e-commerce model represents a transaction between
businesses and individuals. It's the most common business strategy for both physical retailers
who sell goods online as well, like Amazon or eBay to name just two examples out of countless
others available in our society today!
Business To Business (B2B)
The B2B (business-to-business) e-commerce model is a business-to-business transaction in
which one party provides products or services for another.
The B2B e-commerce market is a thriving space for businesses looking to buy products from
other companies. The process typically starts with an offer made by the business that desires
goods or services, which may be accepted via email and then completed through any number of
means including phone calls, web chats (such as Skype), instant messages on Face book
Messenger etcetera-whatever works best suited for both parties involved!
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Consumer To Business (C2B)
The C2B (consumer-to-business) model is the best way for individuals who have products or services that
they would like to offer companies. In this framework, entrepreneurs work with clients at all levels of business
from small start-ups through multinational corporations; freelancers can also fall under these categories if
their projects span different organizations over time rather than being confined exclusively on one side as per
client assignments
Consumer To Consumer (C2C)
The C2C (consumer-to-consumer) e-commerce is a booming industry that connects consumers. This is a type
of online business model that focuses on selling goods and services directly from the seller to their customer.
Consumers sell their assets or services online through third-party websites, Individuals use platforms like
eBay or Amazon as third parties for placing ads, connecting them with potential buyers/sellers to get sales
going!
The way to sell online is not always easy, but it's worth the effort. As opposed to selling your product or
service at physical stores you can use C2C e-selling techniques so that all of those involved will be
connectable through social media platforms such as Facebook, Instagram, etc.!
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Government To Business (G2B ）
What could be more efficient than interacting with your government through an online platform? Businesses can
now make transactions and accommodations for their needs in just a few clicks. This saves both times, money and
strengthens the bond between corporate entities because it reduces paperwork!
When the government requires something done, they hire a private company to do it. The classic example of this is
when you go on your tax website and pay taxes without ever having had to contact an actual person from Revenue
Protection Agency beforehand!
Government to Consumer (G2C)
The G2C (Government-to-consumer) transactions will be made easier with the help of online platforms. This way,
citizens can complete their tasks at home online where it is much quicker and more convenient for them.
One of the most effective ways to improve government efficiency is through online transactions. These processes
can streamline communication between governmental organizations and citizens, who may use this method for
paying fees among other things. It's faster than snail mail!
E-BUSINESS REVENUE
MODEL
1. Advertising Revenue Model : In this case, a web site provider
content and services mixed with advertising messages in the form
of ads. The banner ads may be major source of revenue for the
broadcaster. Ex: Google, Facebook.
2. Subscription Revenue Model: In this type of model, users are
charged a periodic fee, which may be in the form of daily monthly
or annual fee to subscribe to a service. The service offerings of
these companies general include music, videos, TV channels,
magazines, special services etc.
3. Affiliated Revenue Model: This type of model deals with a
business that follows the principle of Commission Merchants and
vendors partner up with well-known E-Commerce platform to
advertise and sell their product giving them a percentage of the
profit as a commission.
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4. Transaction Fee Revenue Model: The e-commerce business
following the transaction fee revenue model charges a fee to a
seller for every transaction made through them. They are the
payment companies that provides the payment gateway services
to other e-commerce business platforms. Ex: Paypal.
5. Sales Revenue Model: This is the most commonly followed e-
commerce business model where wholesalers and retailers sell
their product over the internet intending to reach out to a larger
target audience.