E-Commerce Notes

Unit-1
-> Electronic Commerce
E-commerce (electronic commerce) is the buying and selling of goods and
services, or the transmitting of funds or data, over an electronic network,
primarily the internet.
 It is commonly known as electronic marketing.
 It consist of buying and selling goods and services over an electronic system
such as the internet.
 E-commerce is the purchasing, selling & exchanging goods and services
over computer network or internet through which transactions or terms of
sale are performed electronically.
 E-commerce is the buying and selling of goods and services over the
internet.
 It is conducted over computers, tablets, smartphones, and other smart
devices.
 Almost anything can be purchased through e-commerce today, which
makes e-commerce highly competitive.
 It can be a substitute for brick-and-mortar stores, though some businesses
choose to maintain both.
 E-commerce operates in several market segments including business-to-
business, business-to-consumer, consumer-to-consumer, and consumer-to-
business.
E- Commerce Vs E-business
 We use the term e-business to refer primarly to the digital enablement of
transactions and process within a firm, involving information systems under
the control of the firm.
 E-commerce include commercial transactions involving an exchange of
value across organizational boundaries.
 In e-business every term i.e. Business, Customer, Employers everyone is
connected over the internet, but in E-commerce it is not necessary.
The Process of E-commerce
 A consumer uses web browser to connect to the home page of a
merchant’s web site on the internet.
 The consumer browses the catalog of products featured on the site and
selects items to purchase. The selected items are placed in the electronic
equivalent of a shopping cart.
 When the consumer is ready to complete the purchase of selected itmes,
he/she provides a bill-to and ship-to address for purchase and delivery.
Types of E-Commerce
1. Business-to-Consumer (B2C) :- B2C e-commerce companies sell the product
directly to the end-user. Instead of distributing goods to an intermediary, a
B2C company performs transactions with the consumer that will ultimately
use the good.
Example :
 Dell selling me a laptop
2. Business-to-Business (B2B) :- In B2B e-commerce companies sell their goods
to another company. B2B transactions often entail larger quantities,
greater specifications, and longer lead times. The company placing the
order may also have a need to set recurring goods if the purchase is for
recurring manufacturing processes.
Example :
 Intel selling microprocessor to dell
 Heinz selling Ketchup to Mc Donalds
3. Business-to-Government (B2G) :- Some entities specialize as government
contractors providing goods or services to government agencies or
administrations.
Example :
 Businesses pay taxes, file reports, or sell goods and services to
government agencies
4. Consumer-to-Consumer (C2C) :- Established companies are the only entities
that can sell things. E-commerce platforms such as digital marketplaces
connect consumers with other consumers who can list their own products
and execute their own sales.
Example :
 Merry buying an iPod from Tom on eBay
 Me Selling a car to my neighbour
5. Consumer-to-Business (C2B) :- Modern platforms have allowed consumers
to more easily engage with companies and offer their services, especially
related to short-term contracts, gigs, or freelance opportunities.
6. Consumer-to-Government (C2G) :- Less of a traditional e-commerce
relationship, consumers can interact with administrations, agencies, or
governments through C2G partnerships. These partnerships are often not
in the exchange of service but rather, the transaction of obligation.
7. Government-to-Consumer (G2C) :-
 This Model is also a part of e-governance
 The objective of this model is to provide good and effective services
to each citizen.
 The government provides the following facilities to the citizens
through website :
o Information of all government departments,
o Different welfare schemes,
o Different application forms to be used by the citizens.
8. Government-to-Business (G2B) :- Government-to-business is a business
model that refers to government providing services or information to
business organizations.
Government uses B2G model website to approach business
organizations. Such websites support auctions, tenders and
application submission functionalities.
Advantages of E-Commerce
 Faster buying/selling procedure, as well as easy to find products.
 Buying/Selling 24/7
 More reach to customers, there is no theoretical geographic limitations.
 Low operational costs and better quality of services.
 No need of physical company set-ups.
 Easy to start and manage a business.
 Customers can easily select products from different providers without
moving around physically.
Disadvantages of E-Commerce
 Unable to examine products quality
 Not everyone is connected to the Internet
 There is possibility of credit card number theft
  Mechanical failure can cause unpredictable effects on the total processes
 Potential Security threats
 Competition
 IT issues
 Shipping logistics
 Limited connection with customers

-> Scope of E-Commerce

The scope of e-commerce business is turning out to be more famous day-after-
day according to the market demand. And this requirement is generating
innovations worldwide focused on delivery time ease of transactions and several
features served by ecommerce business, for example, drone delivery or artificial
intelligence.
You must understand that in the modern world the most valuable resource is
time. People want to manage more, but spend less time, E-commerce comes to
the rescue.
Online is all much faster and we save time, so e-commerce is becoming more
popular every year. The future is behind it.
The scope of e-commerce refers to the breadth and depth of activities that are
included within the field of e-commerce. The scope of e-commerce encompasses
a wide range of online transactions and activities, including:
 Cross- border e-commerce : Cross-border e-commerce refers to the buying
and selling of goods and services across national borders.
 Digital goods and services : Digital goods and services refers to products
that are delivered and consumed in a digital form. Example include
software, music, e-books etc.
 Online marketplaces : Online marketplace, such as Amazon and eBay, are
websites that bring together buyers and sellers to facilitate transactions.
 E-payment systems : E-payment systems, such as PayPal, are essential
components of the e-commerce to make payments online, and for
businesses to receive payment for their products and services.
 E-marketing and advertising : E-marketing and advertising refers to the use
of digital channels to promote and sell products. This includes activities
 such as email marketing, search engine optimization, social media
marketing, and online advertising.
 Logistics and delivery : Logistics and delivery refers to the processes of
getting products from the manufacturer or warehouse to the customer.
 Selling can be focused to the global customer
 Pre-sales, subcontracts, supply
 Financing and insurance
 Commercial transactions : ordering, delivery, payment
 Product service and maintenance
 Co-operative product development
 Distributed Co-operative working
 Use of public and private services
 Business-to-administration (e.g. Customers etc)
 Transport and logistics
 Public procurement
 Automatic trading of digital goods.
 Accounting
 Dispute resolution

-> Traditional Commerce VS E-commerce

Traditional Commerce
 Traditional commerce means exchange of products and services,
including all activities which encourages and promote exchange.
 In traditional commerce cost has to be increased because there may be
distributors or wholesalers.
 The geographical area is limited for the business
 It takes a lot of time to complete a transaction in traditional commerce
 Goods can be inspected physically before purchase
 Heavy dependency on information exchange from person to person
 Communication/ transaction are done in synchronous way. Manual
intervention is required for each communication or transaction.
 It is difficult to establish and maintain standard practices in traditional
commerce.
 Unavailability of a uniform platform as traditional commerce depends
heavily on personal communication.
  Communications of business depends upon individual skills.
 No uniform platform sharing as it depends heavily on personal
communications.
E-commerce
 E-commerce means carrying out commercial transactions or exchange
of information, electronically on the Internet.
 E-commerce is cost effective as cost incurred on middlemen is
eliminated.
 The geographical area has no limitation in Electronic commerce
 E-commerce saves time for both the consumers and business as the
transaction can be completed in few minutes.
 Goods cannot be inspected physically before purchase.
 Information sharing is made easy via electronic communication
channels making little dependency on person to person information
exchange.
 Communication or transaction can be done in asynchronous way.
Electronics system automatically handles when to pass communication
to required person to do the transactions.
 A uniform strategy can be easily established and maintain in e-
commerce
 E-commerce website provides user a platform where all information is
available at one place
 In e-commerce or electronic market, there is no human intervention.
 E-commerce provides a universal platform to support commercial/
business activities across the globe.

-> Impacts of E-Commerce

Social Implications
 Impact on business
 It also depends upon changing customers perspective
 Value, Service and Ease
 Security
 Business and Society
On Marketing
 Issue of marketing strategies, advertising, consumer behaviour and
cultures.
 This moved to telemarketing and TV selling with the advances in telephone
and television technology and finally developed e-CRM, data mining etc.
 Marketing strategy of differentiation increasingly effective
 Product like cycles are shortened
 Greater use of digital promotion
 Brands and retailers increasingly using multiple distribution channels
On Computer Science
 Development of different technologies and languages to support e-
commerce and e-business
 Linking front and back office legacy systems with web based technology.
On Economics
 Positive impact of e-commerce on local and global economics leading to
understanding the concept of a digital and knowledge based economy.
On MIS (Management Information System)
 There has been an impact on analysis, design and implementation of e-
business system within an organization as well as issue of integration of
front end and back end system.
On Human Resource Management
 There has been an impact leading to online recruitment and working from
home.
 Need for employees to have a broader range of digital skills
 Workforce planning
 Increased use of automation in e-commerce changes the workforce needs
 Concerns over the working conditions of staff working in e-commerce
warehouses.
On Operations
 Logistics behind large-scale e-commerce platforms are complex
 Places greater emphasis on close relationships with key suppliers
 Economies of scale are becoming increasingly important.
 On Finance and Banking
 Online Banking has become popular with complex transaction becoming
possible without physically going to bank.
 Significant investment required to set-up e-commerce platforms and to
integrate them with other systems.
 E-commerce likely to involve greater use of multi-currency transactions
 Impact of exchange rate changes more likely to be significant for business
selling online.

-> Electronic Market

E-market is an online place where people can buy and sell things. Instead of going
to a physical store, people can use, their computers or smart phones to browse
products or services, make purchases and have them delivered to their doorstep.
E-markets can be websites or apps that connect buyers and sellers. They provides
a virtual space for transactions to happen, just like a traditional market where
people gather to buy and sell goods. However, in a e-market, everything is done
electronically over the internet.
These online markets have become popular because they offer many advantages.
People can shop from the comfort of their homes, access a wide range of
products or services, compare price easily and often find good deals.
Similarly, sellers can reach a larger audience and expands their businesses
without needing a physical stores.
Example :- Amazon, e-Bay etc. Tours and travels.
An electronic market is an inter-organizational information system they allow the
participating buyers and sellers to exchange information about prices and product
offerings. The firm operating the system is referred to as the intermediary, which
may be market participant- a buyer or seller, an independent third party, or a
multi- firm consortium.
Electronic market are the foundation of electronic commerce. They potentially
integrate advertising, product ordering, delivery of products, and payments
systems.
Basically, an electronic market is a website where companies can buy from and
sell to each other using a common technology platform. They are the commerce
sites on the internet that allow a large number of buyers and suppliers to meet
and trade with each other. They are also known as electronic marketplaces,
online markets, e-hubs etc.
E-markets are used for the following reasons :-
 Lower co-ordination cost : Electronically linked retailers are able to lower
their cost by reducing intermediatory transactions and unnecessary
coordination due to direct electronic transaction with the consumer.
 Low Computing cost : The computing cost for electronic market is much
lower than the traditional market.
 Online Review system : Through the online review system, one can check
the other’s review on a particular product and check if the product is really
good or not.
 Multiple choice preference : E-market provide a wide variety of products,
so that one can choose its preference and can buy his desired product.
E-commerce vs E-markets
E-markets specially refers to the platform where buyers and sellers interact and
conduct transactions, while e-commerce encompasses the broader concept of
conducting commercial activities electronically, including all the processes and
infrastructure involved in online business transactions.

-> Internet Commerce

Internet commerce is like a subset of e-commerce. Internet commerce is the use
of the internet for all phases of creating and completing business transactions.
Features of Internet Commerce
 The full sales and marketing cycle
 Identifying new markets
 Developing ongoing customer relationships
 Assisting potential customers with their purchasing decision
 Providing round-the-clock point of sale
 Supply Chain Management
 Ongoing Customer Support
 Stages of Internet Commerce
 The World-Wide-Web as an online product catalogue
 Pre-sales support through electronic mail
 Full transaction processing for placing orders
 Delivery of product or product update information
 Collecting details of prospective customers’ interests
 Provision of interactive discussion facilities for customers

-> E-Commerce in Perspective

1. Business Perspective : From a business perspective, e-commerce offer
numerous advantages. It provides an opportunity for businesses to reach a
global audience without the limitations of physical locations. E-commerce
allows a businesses to operate 24/7, enabling customers to make purchases
at their convenience. It also reduces operational costs as there is no need
for physical storefronts or extensive manpower.
2. Consumer Perspective : E-commerce has transformed the way consumers
shop and interact with businesses. From the consumer’s perspective, e-
commerce offers convenience, accessibility, and a wide range of choices.
3. Logistics and Supply chain Perspective : E-commerce has significantly
impacted logistics and the supply chain. From warehousing and inventory
management to order fulfilment and delivery, e-commerce has introduced
new challenges and opportunities. Businesses need to optimize their
logistics operations to ensure timely and efficient delivery of products.
4. Social Perspective : E-commerce has also had a social impact on society. It
has provided opportunities for small businesses and entrepreneurs to enter
the market with minimal upfront costs. E-commerce platforms and
marketplaces have created opportunities for individuals to start their own
online stores and reach a global audience.
5. Legal and Regulatory Perspective : E-commerce has presented legal and
regulatory challenges. Governments and regulatory bodies have had to
adapt to the rapidly evolving digital landscape to ensure consumer
protection , data privacy, and fair competition. Laws and regulations
related to online transactions, consumer rights, data protection, and
taxation have been developed and continue to evolve to addresses the
complexities of e-commerce.
 6. Service Perspective : It addresses the desire of government, firms,
consumers, and management to cut service cost.
It improves the quality of service and increases the speed of service
delivery.
7. Learning Perspective : It is enabler of online and education in schools,
universities, and other organization, including businesses.
8. Collaboration Perspective : It facilitates inter-organizational and intra-
organizational collaboration.
9. Community Perspective : It provides a gathering place for community
members to learn transact and collaborate E.g. Facebook, LinkedIn,
Myspace.
10. Communication Perspective : It is the ability to deliver products, services,
information, or payments via networks like the internet.
11.Interface Perspective : E-commerce means information and transaction
exchange.
12.Online : E-commerce is an electronic environment that allows sellers to buy
and sell products, services, and information on the internet. The products
may be physical like Cars, computers, books or services like news or
consulting.
13.Market : E-commerce is a world wide network. A local store can open a
web storefront and find the world at doorstep- customers, suppliers,
competitors, and payment services, Of course, an advertising presence is
essential.

-> Application of E-commerce in Direct Marketing and Selling

Direct marketing is a very popular and widely method of informing people about
products and services in order to make sales. It’s method of contacting customers
and potential customers personally. Using e-commerce, companies provide credit
and electronically buying facilities to a customer in order to facilitate to a
customer in order to facilitate the customers and to attract the attention of
customers.
Following are the application of e-commerce in direct marketing and selling :-
 Introduction and rapid promotion of a product through direct link,
interactive and customizable information to the customer.
  Generation of responsive feedback to customer inquiries, capturing and
tracking of information about consumer requests and providing customized
services based on personal needs and interests of consumers.
 Reduced delivery time of digitized products like music, software, online
education, and consultancy.
 Elimination of all the administration work and transport time.
 Increased in customer satisfaction because of availability of online detailed
information and quick response to his queries via email.
 Targeting customer segments with personalized offers and generating sales
leads through observation and analysis of customer behaviour.
 Providing the easiest, cost-effective and quickest method to contact the
customers directly.
 Surveys can be easily conducted without the involvement of the machinery
of surveyors.
 Data about transactions of customers along with their personal information
can be collected and stored into databases. Analysis of this data helps in
achieving a higher return of investment.
 An opening of new markets that were not accessible and facilitating export
in international markets directly.

-> Obstacles in Adopting e-commerce applications

 Lack of Awareness : The primary obstacles to the adoption of e-commerce
is the lack of awareness of e-commerce and the unavailability of access to
telecom infrastructure at a reasonable cost.
 Lack of Trust and Confidence : The another main obstacle in the growth of
e-commerce market is lack of trust and confidence. In various aspects of
electronic marketplace organizations fear doing business with international
marketplaces with due to culture backgrounds and fear of being deceived,
due to lack of knowledge of new technologies.
 The difficulty in re-engineering the business process : It takes much longer
than expected to position an entire organization to benefit form e-
commerce. Reengineering paper-driven processes and convincing people to
use the new system regularly are slowing the pace of implementation.
 High rate of return of goods : E- commerce in India has many first time
buyers. This means that they have not yet made up their mind about what
to expect form e-commerce websites. As a result, buyers sometimes fall
prey to hard sell(Instant Placing order for goods by watching advertisement
 or offers). But by the time the product is actually delivered, they regret and
return the goods. Returns are expensive for e-commerce companies.
 Cash on delivery is the preferred payment mode : Low credit card access
and low trust in online transactions has led to cash on delivery being the
preferred payment choice in India. Unlike electronic payments, manual
cash collection is risky and expensive. COD mode of payment is regarded as
a drawback. COD delays the payment to e-commerce company because
buyer will pay when he or she will receive the product. It will then go to the
courier companies which after 2-3 weeks give payments to the actual seller.
 Payment gateways have a high failure rate: Indian payment gateways have
an unusually high failure rate by global standards. E-commerce companies
using Indian payment gateways are losing out on business, as several
customers do not attempt making payment again after a transaction fails.
 The start-up costs of the e-commerce portal are very high. The setup of the
hardware and the software, the training cost of employees, the constant
maintenance and upkeep are all quite expensive
 Security Issue : E-commerce sites record crucial and sensitive details of
customers such as name, phone number, address and bank details. Though
many e-commerce firms try to make transactions over their website secure
through SSL that encrypts the transferred information, still many cases of
online password hacking has occurred. It has adversely affected the trust
and confidence of customers about e-commerce shopping.
 Inability to See and Feel Products before purchase
 Uncertainty about quality
 Delay in delivery
 Lack of Favorable Reviews.
 Weak Payment and delivery system.
 Lack of knowledge of E-commerce
 Poor Shopping Experience.

-> Future of E-Commerce

 Augmented reality will go commonplace
This will personalized shopping experience, it allows the customer to try a
product before making the purchase. Through this, the person can see that
the product is good for them or not.
 Cryptocurrency becoming a common payment option
 Social Media
Social media like facebook and instagram will let their user to buy product
directly from their website and apps. Social media platform are excellent
platform for selling and buying product.
 Virtual reality will be essential to marketing endeavors
 Drone Delivery
Drone delivery will become very common in future. Through which delivery
of the product will become fast.
 Google’s Buy Now Button
 Artificial Intelligence
 More product descriptions will follow a video format.
People prefer the video description of product more rather than the text
description of a product, so in future the video description of product is
more common. People buy product most likely from video description of a
product rather than text description.
 Voice commerce
Voice commerce in the future will be popular.