E-commerce 2019: Business. Technology.

Society.
Fifteenth Edition, Global Edition

Chapter 1

Introduction to
E-commerce

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Learning Objectives
1.1 Understand why it is important to study e-commerce.
1.2 Define e-commerce, understand how e-commerce differs from e-
business, identify the primary technological building blocks underlying e-
commerce, and recognize major current themes in e-commerce.
1.3 Identify and describe the unique features of e-commerce technology
and discuss their business significance.
1.4 Describe the major types of e-commerce.
1.5 Understand the evolution of e-commerce from its early years to
today.
1.6 Describe the major themes underlying the study of e-commerce.
1.7 Identify the major academic disciplines contributing to e-commerce.

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Everything On Demand: The
“Uberization” of E-commerce
• Class Discussion
– Have you used Uber or any other on-demand service
companies?
– What is the appeal of these companies for users and
providers?
– Are there any negative consequences to the increased
use of on-demand services like Uber and Airbnb?

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The First Thirty Seconds
• First two decades of e-commerce
– Just the beginning
– Rapid growth and change
• Technologies evolve at exponential rates
– Disruptive business change
– New opportunities
• Why study e-commerce
– Understand opportunities and risks
– Analyze e-commerce ideas, models, issues

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Introduction to E-commerce
• Use of Internet to transact business
– Includes Web, mobile browsers and apps
• More formally:
– Digitally enabled commercial transactions between
and among organizations and individuals

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The Difference between E-commerce
and E-business
• E-business:
– Digital enabling of transactions and processes within a
firm, involving information systems under firm’s control
– Does not include commercial transactions involving an
exchange of value across organizational boundaries

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Technological Building Blocks
Underlying E-commerce
• Internet
• World Wide Web
– HTML
– Deep Web v s “surface” Web
ersu

• Mobile platform
– Mobile apps

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Insight on Technology: Will Apps Make
the Web Irrelevant?
• Class Discussion
– What are the advantages and disadvantages of apps,
compared with websites, for mobile users?
– What are the benefits of apps for content owners and
creators?
– Will apps eventually make the Web irrelevant? Why or
why not?

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Major Trends in E-commerce
• Business trends include:
– All forms of e-commerce show very strong growth
• Technology trends include:
– Mobile platform has made mobile e-commerce reality
• Societal trends include:
– Increased online social interaction and sharing

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Unique Features of E-commerce
Technology
Unique Features of E-commerce
Technology (1 of 3)
1. Ubiquity
 It’s available just about everywhere, at all times
 Marketspace vs. Marketplace
 Ubiquity reduces transaction costs
2. Global reach
 permits commercial transactions to cross cultural,
regional, and national boundaries
 the potential market size is roughly equal to the size of
the world’s online population
3. Universal standards
 technical standards for conducting e-commerce are
shared by all nations around the world
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Unique Features of E-commerce
Technology (2 of 3)
5. Information richness
 refers to the complexity and content of a message
6. Interactivity
 the enabling of two-way communication between
merchant and consumer and among consumers.
7. Information density
 refers to the total amount and quality of information
available to all market participants
 Benefits:
 Price transparency
 cost transparency
 price discrimination (Merchant side)
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 Unique Features of E-commerce
Technology (3 of 3)
5. Personalization/customization
 Personalization of marketing messages and
customization of products and services are based on
individual characteristics
6. Social technology
 Enables user content creation and distribution, and
support social networks

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Types of E-commerce
• Business-to-Consumer (B2C)
• Business-to-Business (B2B)
• Consumer-to-Consumer (C2C)
• Mobile e-commerce (M-commerce)
• Social e-commerce
• Local e-commerce

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 Copyright © 2016 Pearson
Education, Ltd.

Slide 1-15
The Relative Size of different Types of
Ecommerce in US
Figure 1.5 The Growth of B2C E-
commerce in the United States

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Figure 1.7 The Growth of B2B E-
commerce in the United States

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Figure 1.8 The Growth of M-commerce
in the United States

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?!
E-commerce: A Brief History (1 of 4)
• Precursors
– Baxter Healthcare modem-based system
– Order entry systems
– Electronic Data Interchange (EDI) standards
– French Minitel

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E-commerce: A Brief History (2 of 4)
• 1995–2000: Invention
– Sale of simple retail goods
– Limited bandwidth and media
– Euphoric visions of
▪ Friction-free commerce
▪ First-mover advantages
– Dot-com crash of 2000

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E-commerce: A Brief History (3 of 4)
• 2001–2006: Consolidation
– Emphasis on business-driven approach
– Traditional large firms expand presence
– Start-up financing shrinks
– More complex products and services sold
– Growth of search engine advertising
– Business web presences expand

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E-commerce: A Brief History (4 of 4)
• 2007–Present: Reinvention
– Rapid growth of:
▪ Web 2.0, including online social networks
▪ Mobile platform
▪ Local commerce
▪ On-demand service economy
– Entertainment content develops as source of revenues
– Transformation of marketing

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Figure 1.10 Periods in the Development
of E-commerce

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Assessing E-commerce (1 of 2)
• Stunning technological success
• Early years a mixed business success
– Few early dot-coms have survived
– Online sales growing rapidly
• Many early visions not fulfilled
– Price dispersion
– Information asymmetry
– New intermediaries

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Assessing E-commerce (2 of 2)
• Other surprises
– Fast-follower advantages
– Start-up costs
– Impact of mobile platform
– Emergence of on-demand e-commerce

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Understanding E-commerce:
Organizing Themes
• Technology:
– Development and mastery of digital computing and
communications technology
• Business:
– New technologies present businesses with new ways
of organizing production and transacting business
• Society:
– Intellectual property, individual privacy, public welfare
policy

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Figure 1.11 The Internet and the
Evolution of Corporate Computing

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Academic Disciplines Concerned with
Technology
• Technical
– Computer science, management science, information
systems
• Behavioral
– Information systems research, economics, marketing,
management, finance/accounting, sociology

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Careers in E-commerce
• Position: Category specialist in E-commerce Retail
Program
• Qualification/Skills
• Preparing for the Interview
• Possible Interview Questions

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