MODULE 9: E-COMMERCE

Learning objectives
In this module, you will:
 Learn about the definition of E-commerce.
 Discuss about the advantages and the disadvantages of E- commerce.
 Learn about the types of E-commerce models.
 Learn about parts of an e-commerce system.

UNIT 17 : DEFINITION AND BENEFITS OF E-COMMERCE

17.1 Definition of e-Commerce

A simple definition of e- Commerce does not exist that adequately describes the
coverage of its operations, functions and underlying technologies. One common view is:
E-Commerce is online shopping via the Internet. It is any commercial activity conducted
electronically, particularly via private or open networks, such as the Internet. The key
point of this definition is that e-Commerce is a confluence of business operations with
electronic and network technologies.

Telephony and non-networked technologies such as

CD-ROM media may integrate into operations, but the
core of e-Commerce is network technologies and
especially open networks such as the Internet.

17.2 Benefits of E- Commerce

The market for e- Commerce is growing, because as more consumers and
businesses gain Internet access and transaction processing technologies improve security.
Companies that establish and operation today, still in the early stages of Internet based E-
Commerce, will have a fuller understanding of the issues and be better prepared to
capitalize on emerging technologies when e-Commerce markets open up in the next few
years.
 The benefits of e-Commerce to a small business may include capabilities:
 Extend the range of sales territory
 Streamline communication to suppliers and clients
 Expand reach to new clients
 Improve service to existing clients
 Reduce paperwork and time spent on correspondence
 Track customer satisfaction
 Expedite billing
 Improve collaboration on work projects
 Expand markets beyond geographical, national boundaries
 Leverage legacy data
 Improve inventory control, order processing
 Establish position in emerging e-Commerce marketplace
 Lower costs of overhead
 Realize economies of scale by increasing sales volume to new markets
 Monitor competition and industry trends
 Improve or expand product lines-locate new suppliers, products that could be
included in catalogue.

17.3 Barriers to Business and Consumer Target Markets

Business-to- business and e- Commerce are presently the bulk of commercial
volume over the Internet, although business-to-consumer traffic is growing and has the
potential to become an even larger market.
 Internet not yet fully established
The primary reason why business-to-
consumer e-Commerce has not kept pace is that the
Internet is still not as established in the home as it is
in the office. Many businesses have invested in
Internet access technologies, are online and ready to
expand their commercial capabilities into this
emerging marketplace.
Consumers should come as the costs of
Internet access decrease, data throughput increases
and Internet connectivity becomes as simple to initiate and common place in the home as
television and telephones
 Low confidence in security technologies
 Low confidence in security technologies has also restricted growth of e- Commerce
activity. Business-to consumer e-Commerce in particular has suffered from poor
consumer confidence in secure monetary and personal data transactions. Business
confidence in secure transactions is higher and continues to increase as electric payment
encryption technologies are widely employed. It is important to note that this issue is
strictly about confidence. Secure technology exists today. This indicates that business is
either more informed or willing to take risks than consumers are. In either case, business-
to business e- Commerce is vibrant and demonstrates a confidence in the supportive
technologies that should continue to transfer to consumers.
 Legal issues
A third barrier to growth is the concern of legal issues, mostly the uncertainly of
litigious boundaries. Since the Internet crosses political boundaries, legal jurisdiction is in
question. Although the Internet improves access to foreign markets, national
export/import laws still apply.
(Source: Basic English for Computing, Oxford University
Press)

17.4. Reading: Internet shopping: The inside story

A. Read this magazine article about Dalya’s job. What are three parts of an
e-commerce system? Which does Dalya find most difficult to set up?
Dalya Rahman specializes in setting up e-commerce systems. Here, she tells “New
Carrers” magazine about her job.
I work with B2B (business-to-business) e-commerce systems as well as B2C
(business-to-consumer) systems and integrate all the components: the user interface, the
shopping basket and the payment system. The user interface is the part that shopper see
on their screens. For this, I work closely with designers to make it look good; it’s
important that customers enjoy using it.
When customers see an item that they want to buy, they put it in shopping basket.
To set this up, I usually integrate standard software packages with the company’s
website. This software uses small files that the browser puts on the user’s computer,
called cookies, to track the items in the basket. This stage isn’t too difficult – mostly I
just match up the code with the client’s website.
The next step is the payment processing system. This take the customer’s
information – delivery address, credit card number, etc. It processes the payment and
outputs the details so that the company can send out the order. This component is more
complicated: I have to integrate it into several different systems, including the company’s
accounting system. Fortunately, there’s a special data format, EDI, that is Electronic Data
Interchange, which make this easier. EDI is standard in e-commerce systems so that other
kinds of software, such as accounting systems, can accept data from it.
My job is fun because every project is different and I use my technical skills as
well; a great combination!

A. Find the bold words in the article that match these definitions
1 . Put together two or more things so that they work well together ……………
2. Smaller parts of something bigger …………………………………………….
3. Computer programming instructions…………………………………………..
4. Taking a series of steps to do something …………………………………….
5. The place to send goods ………………………………………………………
6. The items that a customer wants to buy……………………………………….
7. Looking after money in an organization………………………………………

C. Read the article again and answer the questions.

1 For which component is appearance important?
2 Which component involves integration with something else?
3 What do e-commerce websites use cookies for?
4 For which component is programming mentioned?
5 Which item involves integration with more than one other component?
6 Where does the company get delivery information from?
7 Why is EDI useful?

D. There are three acronyms in the article Underline them and their meanings

17.5. Consolidation
17.5.1. Choose the best answer
1. Most common uses of the Internet and the Web include communicating, .
A. Searching, entertainment, and education
B. E-commerce, e-mail, and searching
C. E-mail, entertainment, and education
D. E-commerce, e-mail, and education
2. Telecommunication………..to the transmission of signals over a distance for the
purpose of communication.
A. means
 B. transmits
C. refers
D. connects
3. The fastest-growing application for the Internet is…………….
A. Going shopping
B. Conducting research
C. Playing games, reading, and listening to music
D. Using e-mail
4. What is the best definition of 'search engine'?
A. any electronic cross-referencing document first prophesized by Vannevar
Bush in 1945.
B. software that interprets a mark-up language such as HTML, and converts
them into human readable web pages
C. software that indexes network resources and enables users to search that
index using categories and/or keywords
D. a predecessor to modern websites, these were early communities that users could
dial using a modem
5. The extensions .gov, .edu, .mil, and .net are called…………..
A. DNSs
B. E-mail targets
C. Domain codes
D. Mail to addresses
6. These types of commercial Internet service providers are the most widely
used……
A. National service providers
B. Regional service providers
C. Centralized service providers
D. Decentralized service providers
7. What is the best definition of 'power supply'?
A. an electronic device constructed from microscopic transistors and other circuit
elements on a single integrated circuit; popular manufactures of these devices include
Intel, AMD, and IBM
B. a calculation, normally including decimal points, that a particular computer can
perform in a single operation
C. a separate unit or part of a circuit that supplies the correct amount of electrical
current to a computer system.
 8. What is the best definition of 'e-commerce' or 'electronic commerce'?
A. The root or main page for a web site
B. The term for buying and selling goods and services over the World Wide
Web
C. A symbol that uses the characters on a computer keyboard to convey
emotion an email or instant message, such as the smiley face .

9. What is the best definition of 'WWW' or 'World Wide Web'?

A. a global hypertext system operating on the Internet that enables electronic
communication of text and multimedia
B. a predecessor to modern websites, these were early communities that users
could dial using a modem.
C. an organization which develops specifications and guidelines for the World
Wide Web

10. What is the best definition of 'authenticate'?

A. The transfer a file or files from a remote computer to the user's computer
B. To verify that a process is true or correct; for example: to verify a user
login and password
C. To shut down and restart a computer
17.5.2. Read the following paragraphs(1-4) and fill in the correct types of E-
commerce(A-D) below.
A. Consumer to Consumer (C2C)
B. Consumer to Business (C2B)
C. Business to Consumer (B2C)
D. Business to Business (B2B).
Types of E-Commerce Models
Electronic commerce can be classified into four main categories. The basis for this
simple classification is the parties that are involved in the transactions. So the four basic
electronic commerce models are as follows,
1.__________This Business to Business transactions. Here the companies are doing
business with each other. The final consumer is not involved. So the online transactions
only involve the manufacturers, wholesalers, retailers etc.
 2.__________Here the company will sell their goods and/or services directly to the
consumer. The consumer can browse their websites and look at products, pictures, read
reviews. Then they place their order and the company ships the goods directly to them.
Popular examples are Amazon, Flipkart, Jabong etc.
3.___________where the consumers are in direct contact with each other. No
company is involved. It helps people sell their personal goods and assets directly to an
interested party. Usually, goods traded are cars, bikes, electronics etc. OLX, Quikr etc.
follow this model.
4.____________This is the reverse of B2C, it is a consumer to business. So the
consumer provides a good or some service to the company. Say for example an IT
freelancer who demos and sells his software to a company. This would be a C2B
transaction.
(Source: https://www.toppr.com/guides/business-environment/emerging-trends-in-
business/electronic-commerce)
17.5.3 Translate the following passage into Vietnamese
Advantages of E-commerce
Overcome Geographical Limitations
If you have a physical store, you are limited by the geographical area that you can
service. With an e-commerce website, the whole world is your playground. Additionally,
the advent of M-commerce, (i.e.: e-commerce on mobile devices) has dissolved every
remaining limitation of geography.
Gain New Customers with Search Engine Visibility
Physical retail is driven by branding and relationships. In addition to these two
drivers, online retail is also driven by traffic from search engines. It is not unusual for
customers to follow a link in search engine results and land on an e-commerce
website that they have never heard of. This additional source of traffic can be the tipping
point for some e-commerce businesses.
Lower Costs
One of the most tangible positives of e-commerce is the lowered cost. A part of
these lowered costs could be passed on to customers in the form of discounted prices.
Here are some of the ways that costs can be reduced with e-commerce:
Advertising and marketing: Organic search engine traffic pay-per-click, and social
media traffic are some of the advertising channels that can be cost-effective.
Personnel: The automation of checkout, billing, payments, inventory management,
and other operational processes lowers the number of employees required to run an e-
commerce setup.
Real estate: This one is a no-brainer. An e-commerce merchant does not need a
prominent physical location.
Locate the Product Quicker
It is no longer about pushing a shopping cart to the correct aisle or scouting for the
desired product. On an e-commerce website, customers can click through intuitive navigation
or use a search box to narrow down their product search immediately. Some websites
remember customer preferences and shopping lists to facilitate repeat purchase.
Provide Comparison Shopping
E-commerce facilitates comparison shopping. There are several online services that
allow customers to browse multiple e-commerce merchants and find the best price
Enable Deals, Bargains, Coupons, and Group Buying
Though there are physical equivalents to deals, bargains, coupons, and group
buying, online shopping makes it much more convenient. For instance, if a customer has
a deep discount coupon for turkey at one physical store and toilet paper at another, she
may find it infeasible to avail of both discounts. But the customer could do that online
with a few mouse-clicks.
(Source: https://www.thebalancesmb.com/advantages-of-ecommerce