E-COMMERCE

ICT 321
Course Grading

1.Attendance and semester project (40 marks)

2.End of Semester Examination (60 marks)
3.Final Mark = (Class Exercises/quizzes + Mid-semester +
End of Semester)
Project for the semester (In groups)
vDesigning and Developing of an E-commerce Website.
 Reading Materials
1. Laudon, K. C., & Traver, C. G. (2022). E-commerce: business. technology. society. (16 ed.).
Edinburgh Gate, England: Pearson Education Limited.

2. Chaffey, D., Hemphill, T., & Edmundson-Bird, D. (2019). Digital Business and E-
Commerce Management, 7th Edition. Manchester Metropolitan University: Pearson UK.

3. Turban, Efraim; King, David; and Lang, Judy (2011), Introduction to Electronic
Commerce (3/e), Prentice-Hall.
Commerce

What is commerce?
Commerce refers to the exchange or trade of goods, services, or commodities
between individuals, businesses, or countries. It encompasses various activities
involved in buying, selling, and distributing products or services to satisfy
human needs and wants. Commerce is a fundamental aspect of economic
systems and plays a vital role in driving economic growth and development.
Types of Commerce:
1.Domestic Commerce: Domestic commerce refers to commercial activities that
take place within the boundaries of a single country. It involves the buying and
selling of goods or services within the domestic market.

2.International Commerce: International commerce involves the exchange of goods

or services between different countries. It includes exports (selling products to
foreign markets) and imports (buying products from foreign markets). International
commerce requires compliance with international trade regulations, customs
procedures, and currency exchange.
Types of Commerce:
3. E-commerce: E-commerce, or electronic commerce, refers to commercial transactions
conducted electronically over the internet. It involves buying and selling products or
services online, using websites, online marketplaces, or other digital platforms.

4. Retail Commerce: Retail commerce involves the sale of goods directly to consumers
for personal use. It includes brick-and-mortar retail stores, online retailers, and various
formats such as department stores, supermarkets, and specialty stores.

5. Wholesale Commerce: Wholesale commerce focuses on selling goods in bulk

quantities to businesses or retailers rather than directly to end consumers.
Introduction to E-commerce

What is E-commerce?
• E-commerce encompasses a wide range of activities, including online retail (e-tail),
digital marketplaces, online auctions, and various forms of electronic funds transfer.

• It involves the use of electronic platforms, such as websites, mobile apps, and
social media, to showcase products or services, facilitate transactions, and provide
customer support.
 Introduction to E-commerce
• E-commerce relies on various technologies and infrastructure, including
secure online payment systems, digital marketing strategies, logistics and
supply chain management, and customer relationship management
(CRM) systems.

• It is continuously evolving, with the emergence of new technologies like

mobile commerce (m-commerce), voice commerce, and the integration of
artificial intelligence (AI) and augmented reality (AR) into the shopping
experience.
E-Commerce: Meaning
E-Commerce or Electronics Commerce is a methodology of modern business which
addresses the need of business organizations, vendors and customers to reduce cost and
improve the quality of goods and services while increasing the speed of delivery.

E-commerce refers to paperless exchange of business information using following ways.

• Electronic Data Interchange/Exchange (EDI)

• Electronic Mail (e-mail)

• Electronic Bulletin Boards

• Electronic Fund Transfer (EFT)

• Other Network-based technologies

E-Commerce: Meaning

• Electronic Data Interchange (EDI) is the exchange of electronic files in a standard

format that is easily processed by a computer so the exchange can be automated

without human intervention.

• EDI allows businesses to exchange important documents such as purchase orders,

invoices, shipping notices, and other transaction-related information without the need

for paper documents or manual data entry. Business entities conducting business

electronically are called trading partners.

E-Commerce
Advantages of EDI

• It is used to manage huge volumes of transactions.

• Minimum operating cost.

• Eliminates delays

• Eliminates data entry errors

E-commerce
• Electronic mail, commonly known as email, is a method of
exchanging digital messages over the internet or other computer
networks.

• Email allows users to send and receive messages, as well as attach

files such as documents, images, or videos.
 E-Commerce

• Electronic bulletin boards (also known as BBS or bulletin board systems) are
computer-based communication systems that enable users to share information
and communicate with each other.

• Electronic Fund Transfer (EFT) is a method of transferring money from one

bank account to another using electronic means, without the need for physical
checks or cash. EFT transactions can be initiated by individuals, businesses, or
government agencies.
Different definitions of E-commerce
1. It pertains to “any form of business transaction in which the parties interact electronically
rather than by physical exchanges or direct physical contact.” – MK, Euro Info
Correspondence Centre (Belgrade, Serbia),

2. E-commerce is usually associated with buying and selling over the Internet, or conducting
any transaction involving the transfer of ownership or rights to use goods or services through
a computer-mediated network. – Thomas L. Mesenbourg

3. A more complete definition is: E-commerce is the use of electronic communications and
digital information processing technology in business transactions to create, transform, and
redefine relationships for value creation between or among organizations, and between
organizations and individuals. – Emmanuel Lallana etal
Electronic Commerce and Electronic Business

• E-commerce refers specifically to the buying and selling of goods and services
over the internet. This can include online marketplaces, online retailers, and online
auctions. E-commerce typically involves a transactional relationship between a
business and a customer, with the exchange of goods or services for money.

• E-business, on the other hand, refers to a broader range of activities that involve
the use of electronic technologies to improve business operations. This can
include e-commerce, but it also includes other activities such as online marketing,
supply chain management, and customer relationship management. .
 Electronic Commerce and Electronic Business
• In essence, e-commerce is a subset of e-business. E-commerce
focuses specifically on the buying and selling of goods and services, while
e-business encompasses a wider range of activities that use electronic
technologies to improve business processes and relationships.

• E-commerce is a way for businesses to use electronic technologies to sell

goods and services, while e-business is a way for businesses to use
electronic technologies to improve their operations and relationships with
stakeholders.
 Types of E-business
• Pure-Play: The business which is having an electronic existence only.

• Brick and Click: The business model, in which the business exists
both in online i.e. electronic and offline i.e. physical mode.
E-Business Components
E-Business Components
1. Business intelligence refers to the collection, analysis, and utilization of data
generated through online transactions, customer interactions, website analytics,
and other digital sources. It involves leveraging technology and tools to
transform raw data into meaningful information for strategic planning,
operational efficiency, and competitive advantage.
2. Customer Relationship Management (CRM) is a vital component of e-
business that focuses on managing and nurturing relationships with customers
in the online environment. CRM in e-business involves leveraging technology,
strategies, and processes to effectively interact with customers, analyse their
behaviour, and tailor personalized experiences.
E-Business Components
3. Supply Chain Management (SCM) refers to the coordination and management of all
activities involved in the flow of goods, services, and information from the sourcing of raw
materials to the delivery of finished products to the end customer. SCM encompasses
planning, procurement, production, inventory management, logistics, and distribution
processes. It aims to optimize the supply chain to achieve efficiency, cost-effectiveness, and
customer satisfaction.

4. Enterprise Resource Planning: is about integrating all departments and functions across
a company (sales, marketing, human resources, finance, accounting, production, engineering,
etc.) into a single computer system that can serve the particular needs of each department.
The objective is to provide information quickly and efficiently to those who need it. Small
businesses have many vendor choices for ERP systems.
E-Business Components
4.E-commerce is the marketing, selling, and buying of goods and services online. It
is a subset of e-business. It generates revenue, whereas other areas of e-
business do not. E-commerce has experienced extraordinary and rapid growth and
will continue to grab more market share. The moment that an exchange of value
occurs, e-business becomes e-commerce.

5. Online activities between businesses in e-business encompass a wide range of

digital interactions and processes conducted between businesses and their
customers, suppliers, partners, or other stakeholders in the online environment. These
activities enable businesses to operate, market, and transact digitally.
E-Business Components
• Collaboration in e-business refers to the cooperative efforts between individuals,
teams, or organizations using digital platforms and tools to work together towards a
common goal. It involves leveraging technology to facilitate communication,
information sharing, and joint decision-making.

• An electronic funds transfer (EFT) or direct deposit, is a digital movement of

money from one bank account to another. These transfers take place independently
from bank employees. As a digital transaction, there is no need for paper documents.
Difference between E-commerce and E-businness
BASIS FOR COMPARISON E-COMMERCE E-BUSINESS
Meaning Trading of merchandise, over the internet Running business using the internet is
is known as E-commerce. known as E-business.

What is it? Subset Superset

Is it limited to monetary Yes No
transactions?

What they carry out? Commercial transactions Business transactions

Approach Extroverted (comprises suppliers, Ambiverted (by including external as well as
distributors, retailers and customers) internal processes for operating its activities
through online platforms.

Requires Website Website, CRM, ERP, etc.

Which network is used? Internet Internet, Intranet and Extranet.
 Evolution and growth of E-commerce
1.Emergence and Early Adoption (1990s):
a. In the 1990s, the internet became accessible to the general public, paving the way for
the emergence of E-commerce.

b. Early pioneers like Amazon and eBay started as online marketplaces, facilitating the
buying and selling of products among individuals and businesses.

c. The focus was primarily on books, electronics, and collectibles, and the user experience
was relatively basic compared to today's standards.
Evolution and growth of E-commerce
2. Dot-com Boom and Bust (late 1990s - early 2000s):
a. The late 1990s witnessed the dot-com boom, with numerous start-ups entering the
E-commerce space, seeking to capitalize on the internet's potential.
b. Investments poured into E-commerce ventures, leading to rapid growth and inflated
expectations.
c. However, many dot-com companies faced financial challenges and ultimately
collapsed during the dot-com bust in the early 2000s.
Evolution and growth of E-commerce
3. Consolidation and Maturity (mid-2000s):
a. Following the dot-com bust, E-commerce entered a phase of consolidation and maturity.

b. Established players like Amazon and eBay expanded their offerings and solidified their
positions.

c. Traditional retailers recognized the importance of E-commerce and started establishing their
online presence.

d. Improved technology, secure online payment systems, and logistics networks contributed to
the growth of E-commerce.
Evolution and growth of E-commerce
4. Mobile Commerce (m-commerce) Revolution (late 2000s - early 2010s):
a. The proliferation of smartphones and mobile internet access led to the rise of mobile
commerce (m-commerce).

b. E-commerce companies adapted their websites and developed mobile apps to cater to the
growing number of mobile users.

c. Mobile payment solutions, such as mobile wallets and contactless payments, made
transactions more seamless and convenient.
d. M-commerce expanded the reach of E-commerce and enabled consumers to shop on-the-go.
Evolution and growth of E-commerce
5. Omnichannel Retailing and Personalization (2010s):
a. Retailers started embracing omnichannel strategies, integrating online and offline
channels to provide a seamless shopping experience.

b. Personalization became a key focus, with businesses leveraging data analytics and
customer insights to offer tailored recommendations and targeted marketing.
c. Social media platforms emerged as influential channels for product discovery and
brand engagement, leading to the rise of social commerce.
Evolution and growth of E-commerce
6. The Dominance of Online Marketplaces and Digital Natives (present):
a. Online marketplaces like Amazon, Alibaba, and JD.com have become dominant
players in the E-commerce landscape, offering vast product selections, competitive
prices, and convenient shopping experiences.
b. Digital native brands, born in the digital era, have disrupted traditional industries and
gained a strong online presence.
c. Technology trends like artificial intelligence (AI), augmented reality (AR), and voice
assistants are being integrated into the E-commerce experience, enhancing
personalization and interactivity.
Who can open an E-commerce shop?
Anyone who’s ready. Provided you have Few essentials to start with.

These essentials includes:

a. Product of service to sell

b. Place to sell.

c. Means to process payments.

d. Marketting Strategies to attract customers.

Essentials for opening an E-commerce shop
1. Product of service to sell.

- Either you make your own or Source it from somewhere else.

• Who are you selling to?

- Consumers

- Businesses

• It has to be Something Unique

• It should solve a problem.

• The cost of your goods and selling price.

 Essentials for opening an E-commerce shop
2. Place to sell your goods

- you’ll need a website or E-commerse platform to sell your products.

- You can build your own website or use CMS(Content Management System)

- CSM allows you to add and edit your products without coding.

Types of CSM

There are three broad types of CMS software:

vopen source

vProprietary

vSoftware-as-a-Service CMS
Essentials for opening an E-commerce shop
a. Open source CMS
vYou can download open source CMS software at no initial cost. There are no licence or upgrade
fees, or contracts.

vHowever, with open source CMS you may have to pay for:

• technical help during installation and set up

• customisation to extend the software beyond the core offering

• staff training

• support, including regularly updating the software

vExamples of the most widely used open source CMS platforms include:

WordPress, Joomla, Drupal, Magento, PrestaShop, Shopify (free for 3 days).

Essentials for opening an E-commerce shop
b. Proprietary CMS

• Proprietary or commercial CMS software is built and managed by a single company. Using such
CMS generally involves:

• buying a licence fee to use the software

• paying monthly or annual charges for updates or support

• You may also need to pay additional costs for customisation and upgrades, as well as for training
and ongoing technical or user support.

Examples of popular CMS solutions include:

• Kentico, Microsoft SharePoint, IBM Enterprise Content Management, Pulse CMS, Sitecore
Shopify
Essentials for opening an E-commerce shop
c. Software as a Service (SaaS) CMS
• SaaS CMS solutions commonly include web content management software, web hosting, and technical
support with a single supplier. These are virtual solutions hosted in the cloud and based on a subscription
model, usually on a per-user or per-site basis.

The pricing usually includes:

• Amount of data transfer (i.e. bandwidth to and from your site)

• Storage for your content and data

• Ongoing support

There are two types of cloud content management systems:

• 'Fully cloud' CMS often comes as part of a package or service. Typically, these are proprietary systems
under the supplier's control, so it isn't always possible to customise or alter their functionality to suit your
needs.

• 'Partial cloud' CMS is located on your own cloud web server. It provides for greater flexibility since you can
modify the functionality, either with add-on modules or by altering the source code.
Choosing A CMS platform
vThings to keep in mind when choosing your CMS platform are:

i. Pricing

ii. Scalability

iii. Flexibility

iv. Ease of Use

• Keep in mind that your website or CMS platform is acting as your physical shop.

• This is where people come to interact with you and purchase your goods.

• Choose where you will sell your goods wisely.

 Overview of AI, VR and AR in E-commerce
• Artificial intelligence is the simulation of human intelligence processes by machines,
especially computer systems. Specific applications of AI include expert systems, natural
language processing, speech recognition and machine vision.

• AI plays a crucial role in e-commerce by enabling businesses to analyse and understand

customer behaviour patterns, enhance the shopping experience, and streamline various
processes.

• AI can help in product recommendations, chatbots, personalized promotions, fraud

detection, and more.
Overview of AI, VR and AR in E-commerce
• Augmented reality (AR) and virtual reality (VR) are technologies that can create
immersive and interactive experiences for customers. They can enhance the e-
commerce journey by providing more information, personalization, and engagement.

• What are AR and VR?

AR and VR are different but related technologies that can alter the perception of reality.
AR adds digital elements to the real world, such as images, sounds, or texts, that can be
viewed through a device like a smartphone or a headset. VR creates a fully simulated
environment that can be experienced through a headset or a controller. Both
technologies can provide rich and realistic sensory feedback to the users.
Overview of AI, VR and AR in E-commerce
• AI has been used as a complementary technology to enhance various aspects of AR and
VR experiences.

Ways in which AI has been applied in the development of AR and VR

1.Computer Vision: AI and computer vision techniques are utilized in AR and VR systems to analyse
and understand the real-world environment or virtual scenes. Computer vision algorithms help
identify objects, track movement, and recognize gestures, enabling more accurate and immersive
interactions within the AR and VR environments.

2.Object Recognition: AI algorithms are employed to recognize and classify objects in AR and VR
applications. This allows the systems to identify and track specific objects in real-time, enabling
virtual objects to interact with real-world objects or aligning virtual overlays with the physical
environment.
Overview of AI, VR and AR in E-commerce
3. Personalization and Recommendation: AI algorithms are employed to personalize AR
and VR experiences based on user preferences, behaviour, and contextual data. These
algorithms analyse user data to deliver personalized content, recommendations, and
tailored experiences, making the AR and VR environments more engaging and relevant to
individual users.

4. Content Generation and Rendering: AI techniques, such as machine learning and deep
learning, are utilized in AR and VR content generation and rendering processes. AI
algorithms can generate realistic 3D models, textures, and animations, and optimize the
rendering process to improve visual quality and performance in virtual environments.
Overview of AI, VR and AR in E-commerce
5. Natural Language Processing (NLP): AI-powered NLP techniques are utilized to enable
voice commands and natural language interactions in AR and VR systems. This allows
users to communicate with virtual assistants or control the virtual environment through
spoken language, enhancing the user experience and ease of interaction.

6. Simulations and Training: AI is used in AR and VR systems for simulations and training
purposes. AI algorithms can create intelligent virtual agents or characters that simulate real-
world behaviours and interactions, allowing users to engage in immersive training scenarios
or simulations.
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