UNIT 1: E - BUSINESS

Introduction:
In the present day, electronic business has become the order of the day with the
presence of internet and web technologies in business. E-business is the conduct of
business on the Internet, not only buying and selling but also servicing customers
and collaborating with business partners.

History of E-commerce:
In 1960 Electronic Data Interchage (EDI) replaced the traditional mailing and
faxing of documents. Further, teleshopping was introduced which was widely used
up to 1982. In 1982, Minitel with the help of videotext terminal was introduced
and was used up to 1991. In the year 1990 web server and web browser was
developed. Internet was introduced in 1991 for trading purpose and many business
entities started to operate online. Further google and yahoo search engines
popularized online activities. After the year 2000, security reforms took place for
online activities which increased the volume of e-business and at present it is
continuing with the use of internet in smart phones, tablets, etc.

Meaning:
E-business generally refers to buying and selling of goods or services through
internet. E-business involves the use of information and communication
technologies to facilitate and support processes and activities of business. In other
words, E-business is the conduct of business on the internet, not only buying and
selling of goods but also servicing customers and collaborating with business
partners.

E-commerce is where business transactions take place via telecommunication

networks like internet. In other words, it refers to conduct of business or financial
transcations by electronic means.

E-commerce, or electronic commerce, refers to the buying and selling of goods

and services over the internet. It has evolved significantly over the years, offering
various features and capabilities that have transformed the way businesses and
consumers interact
 Features of E- Commerce

1. Online Transactions: E-commerce enables businesses and consumers to

conduct financial transactions online. This includes purchasing products,
paying for services, and transferring funds electronically.

2. Digital Storefronts: E-commerce provides businesses with the ability to

create digital storefronts or online marketplaces where they can showcase
their products and services to a global audience. These storefronts are
accessible 24/7.

3. Product Catalogs: E-commerce platforms allow businesses to create and

manage extensive product catalogs. They can display detailed information,
images, and specifications for each item.

4. Search and Navigation: Robust search and navigation features help

customers find products quickly and easily. Filters, sorting options, and
search bars enhance the shopping experience.

5. Shopping Carts: Customers can add products to virtual shopping carts,

review their selections, and make changes before proceeding to checkout.
Shopping carts facilitate the purchase process.

6. Secure Payments: E-commerce platforms incorporate secure payment

gateways to protect customer financial information. Common payment
methods include credit cards, digital wallets, and bank transfers.

7. Order Management: Businesses can efficiently manage orders, track

inventory, and process returns through e-commerce systems. Order history is
often accessible to customers for reference.
8. Personalization: E-commerce platforms can personalize the shopping
experience by recommending products based on past purchases, browsing
history, or user preferences.

9. User Accounts: Customers can create user accounts, which store their
personal information, order history, and payment details for future
purchases, streamlining the checkout process.

10.Reviews and Ratings: Customers can leave reviews and ratings for
products, helping other shoppers make informed decisions. This feedback
contributes to trust and transparency.

11.Mobile Commerce (M-Commerce): E-commerce is accessible via mobile

devices, allowing customers to shop and make purchases using smartphones
and tablets. Mobile apps enhance this experience.

12.Multichannel Selling: Businesses can sell their products and services

through various channels, including their own website, online marketplaces
(e.g., Amazon, eBay), and social media platforms.

13.International Reach: E-commerce breaks down geographical barriers,

enabling businesses to reach customers worldwide. Localization features,
such as multiple languages and currencies, cater to diverse markets.

14.Shipping and Fulfillment: E-commerce platforms offer shipping options,

including calculation of shipping costs, tracking, and delivery notifications.
Some platforms integrate with third-party logistics services.
Advantages of E-commerce:

1. Global Reach: E-commerce allows businesses to reach a global customer

base, breaking down geographical barriers and expanding market reach.

2. 24/7 Availability: Online stores are accessible 24/7, providing customers

with the convenience of shopping at any time, which is particularly valuable
for businesses with international customers.

3. Reduced Operating Costs: E-commerce businesses often have lower

overhead costs compared to brick-and-mortar stores, including reduced
expenses for physical space, utilities, and staff.

4. Personalization: E-commerce platforms can personalize the shopping

experience, providing product recommendations based on customer
preferences and behavior.

5. Convenience: Consumers can shop from the comfort of their homes,

avoiding the need for physical travel and long checkout lines.

6. Diverse Product Offerings: E-commerce enables businesses to showcase a

wide range of products and services, accommodating diverse customer
needs.

7. Improved Inventory Management: Online tools help businesses track and

manage inventory levels efficiently, reducing overstock and understock
issues.

8. Data Analytics: E-commerce platforms provide valuable data on customer

behavior, allowing businesses to make data-driven decisions and refine
marketing strategies.
 9. Cost-Effective Marketing: Online marketing channels, such as social media
and email marketing, are often more cost-effective than traditional
advertising methods.

10.Ease of Expansion: Businesses can scale and expand their operations

quickly and cost-effectively by opening new digital storefronts or entering
new markets.

Disadvantages of E-commerce:
1. Security Concerns: E-commerce transactions can be vulnerable to security
breaches and fraud, leading to potential loss of customer data and trust.

2. Lack of Tangibility: Consumers cannot physically inspect or try products

before purchase, which can lead to uncertainty and dissatisfaction.

3. Shipping Costs: Shipping fees can add to the overall cost of goods,
especially for international shipments, and can deter some customers.

4. Limited Personal Interaction: Online shopping lacks the personal touch

and customer service provided in physical stores, making issue resolution
challenging.

5. Technical Challenges: Customers may encounter technical issues such as

website downtime, slow loading times, or payment processing problems.

6. Returns and Refunds: Handling returns and refunds in e-commerce can be

complex and costly for businesses due to shipping and restocking fees.

7. Competitive Landscape: The ease of starting an online business has led to

intense competition in many e-commerce sectors.
 8. Dependency on Technology: E-commerce businesses rely heavily on
technology infrastructure, making them vulnerable to technical failures,
cyberattacks, and disruptions.

9. Legal and Regulatory Compliance: E-commerce businesses must navigate

complex legal and regulatory frameworks, including tax collection, privacy
laws, and consumer protection regulations.

10.Customer Trust: Establishing trust with online customers is challenging,

especially for new or unknown brands.

Types of E- Commerce
1. Business-to-Consumer (B2C):
 B2C e-commerce involves businesses selling products or services directly to
individual consumers.
 Examples include online retail stores, subscription services, and digital
content providers.
 B2C e-commerce is the most common form and often involves one-time
purchases.

Advantages:
1. Wide Customer Reach: Businesses can access a large and diverse
consumer base globally.
2. Convenience: Consumers can shop 24/7 from the comfort of their
homes.
3. Personalization: B2C platforms can offer personalized shopping
experiences.
 4. Cost Savings: Consumers often find better deals and discounts online.
5. Diverse Product Selection: Online stores offer a wide range of
products.
6. Access to Product Information: Detailed product descriptions and
reviews help consumers make informed decisions.
Disadvantages:

1. Security Concerns: B2C transactions can be vulnerable to security

breaches and fraud.
2. Lack of Tangibility: Consumers cannot physically inspect products
before purchase.
3. Shipping Costs: Shipping fees can add to the overall cost.
4. Depersonalization: Lack of in-person interaction can lead to a
depersonalized shopping experience.
5. Competitive Landscape: Intense competition can make it challenging
for new entrants to stand out.
6. Consumer Trust: Establishing trust with online customers, especially
for new brands, can be difficult.

2. Business-to-Business (B2B):
 B2B e-commerce focuses on transactions between businesses or enterprises.
 It includes wholesale trade, procurement, and supply chain activities.
 B2B e-commerce typically involves bulk orders and long-term contracts.

Advantages:
1. Efficiency: B2B e-commerce streamlines procurement, reducing
paperwork and manual processes.
2. Bulk Orders: Businesses can place bulk orders and negotiate
favorable terms.
3. Personalized Contracts: Custom contracts can be created to meet
specific business needs.
 4. Improved Inventory Management: Businesses can track and
manage inventory efficiently.
5. Scalability: B2B e-commerce platforms can scale to accommodate
growing business demands.
6. Cost Savings: Online procurement often leads to cost savings.

Disadvantages:
1. Complexity: B2B transactions can be more complex due to
contractual negotiations and customizations.
2. Security Risks: Sensitive business data and transactions require
robust security measures.
3. Long Sales Cycles: B2B sales cycles can be longer, requiring more
time and effort.
4. Dependence on Relationships: Building and maintaining
relationships with business partners is critical.
5. Customization Challenges: Meeting diverse business needs can be
challenging.
3. Consumer-to-Consumer (C2C):
 C2C e-commerce enables individual consumers to buy and sell products or
services directly to other consumers.
 Online marketplaces like eBay and classified ads websites are examples.
 Individuals act as both buyers and sellers in C2C transactions.

Advantages:
1. Easy Transactions: Individuals can easily buy and sell products or
services online.
2. Wide Range of Items: Consumers can find unique and niche items.
3. Cost Savings: C2C transactions often result in lower prices.
4. Direct Interaction: Buyers and sellers can communicate directly.
 Disadvantages:

1. Lack of Trust: Trust issues can arise between individuals.

2. Quality Concerns: Buyers may receive items that don't meet their
expectations.
3. Limited Support: There is usually no customer support for C2C
transactions.
4. Disputes: Resolving disputes can be challenging.

4. Consumer-to-Business (C2B):
 In C2B e-commerce, individual consumers offer products or services to
businesses or organizations.
Examples include freelance platforms, where individuals provide services to
companies, and influencer marketing, where individuals promote products for
compensation.

Advantages:
1. Flexibility: Individuals can offer services and products to businesses
on their terms.
2. Cost-Effective Solutions: Companies can find cost-effective
solutions from individuals.
3. Expertise: Businesses can access specialized skills and knowledge.
4. Innovation: C2B can lead to innovative products and services.

Disadvantages:

1. Quality Concerns: Businesses may worry about the quality and

reliability of C2B offerings.
2. Dependence on Individuals: Businesses rely on individual
contractors, which can be less stable.
3. Legal Issues: Contracts and legal agreements may require careful
consideration
 5. Government-to-Citizen (G2C):
 G2C e-commerce involves government agencies providing services and
information to citizens through online portals.
 Examples include online tax filing, voter registration, and government
service websites.
Advantages:
1. Convenience: Citizens can access government services and information
online.
2. Efficiency: G2C e-commerce streamlines government processes and reduces
paperwork.
3. Transparency: Online access to government information promotes
transparency.
4. Reduced Wait Times: Citizens can avoid long lines and wait times for
services

Disadvantages:
1. Digital Divide: Not all citizens have equal access to online services.
2. Security Concerns: Government websites must be secure to protect
sensitive data.
3. Privacy Issues: Government handling of citizen data requires strict privacy
safeguards

6. Business-to-Government (B2G):
 B2G e-commerce comprises transactions between businesses and
government entities.
 It includes procurement, licensing, and regulatory compliance activities.
 Businesses bid for government contracts and submit proposals online.
Advantages:
1. Efficiency: B2G e-commerce simplifies procurement processes for
businesses.
2. Access to Contracts: Businesses can bid for government contracts online.
3. Reduced Administrative Costs: Digital procurement reduces paperwork
and administrative costs.
4. Increased Competition: E-commerce can attract a wider pool of suppliers.
Disadvantages:
1. Complex Regulations: Businesses must navigate complex government
regulations.
2. Security Concerns: Handling government contracts and data requires robust
security measures.

7. Government-to-Business (G2B):
 G2B e-commerce involves government organizations purchasing goods and
services from businesses.
 It can include online registration and permit applications.
 Government entities may use e-commerce to streamline procurement
processes.

Advantages of G2B E-commerce:

1. Efficiency: G2B e-commerce streamlines government processes, reducing
paperwork and manual efforts. This leads to faster transactions and better
service delivery.
2. Cost Savings: G2B e-commerce helps both government agencies and
businesses save money by automating processes, reducing administrative
overhead, and minimizing the need for physical interactions.
3. Transparency: Online access to government procurement opportunities and
services fosters transparency in government operations. This reduces
corruption risks and enhances accountability.
4. Access to Government Opportunities: G2B e-commerce platforms provide
businesses with easy access to government contracts, procurement
opportunities, and regulatory information, expanding business prospects.

Disadvantages of G2B E-commerce:

1. Complex Regulations: Businesses often have to navigate complex

government regulations, compliance requirements, and standards, which can
be time-consuming and challenging.
2. Security Concerns: Handling government contracts and sensitive data
requires robust security measures to protect against data breaches and
cyberattacks, adding a layer of complexity and cost.
3. High Competition: Increased access to government opportunities through
e-commerce platforms can lead to higher competition among businesses,
making it more challenging for individual companies to secure contracts.
4. Dependency on Government Systems: Businesses rely on the functionality
and reliability of government e-commerce systems. Any system outages,
technical glitches, or inefficiencies can disrupt business operations.

8. Peer-to-Peer (P2P) Lending:

 P2P lending platforms connect individuals or businesses seeking loans with
investors willing to lend money.
 These platforms facilitate borrowing and lending without traditional
financial institutions.

Advantages:

1. Efficiency: P2P platforms facilitate direct borrowing and lending

between individuals.
2. Access to Funds: Borrowers can access funds without traditional
financial institutions.
3. Investment Opportunities: Lenders can earn interest on funds lent to
peers.
4. Flexible Terms: Terms of loans and investments can be negotiated.

Disadvantages:
1. Risk: Borrowers may default on loans, and lenders bear the risk of
non-payment.
2. Regulatory Challenges: P2P lending may face regulatory hurdles in
some jurisdictions.
3. Limited Protections: P2P transactions may lack the legal protections
of traditional lending institutions.
 WEB AUCTIONS
Web auctions in e-business refer to online platforms where users can bid on
products or services, with the highest bidder securing the item. These auctions
have become an integral part of e-commerce, offering unique opportunities for
buyers and sellers.

Advantages of Web Auctions:

1. Wider Audience Reach: Web auctions have a global reach, allowing sellers
to access a broader audience of potential buyers, increasing the chances of
finding the right buyer for their items.
2. Competitive Pricing: The competitive nature of auctions often results in
fair market prices, as buyers bid based on what they are willing to pay,
potentially leading to cost savings for buyers.
3. Convenience: Participants can engage in web auctions from the comfort of
their homes, eliminating the need for physical attendance at auction sites.
4. Transparency: Online auctions provide real-time tracking and bidding,
fostering transparency and trust among participants.
5. Diverse Selection: Web auctions offer a wide variety of products, from rare
collectibles to everyday items, catering to diverse interests.

Disadvantages of Web Auctions:

1. Risk of Fraud: Online auctions can be susceptible to fraudulent activities,
including fake listings, shill bidding (fake bids by the seller or their
associates), and non-delivery of goods.
2. Competition: Intense competition among bidders can drive prices up,
potentially resulting in higher costs for buyers.
3. Technical Issues: Participants may experience technical glitches, slow
internet connections, or website errors, disrupting the auction process.
4. Trust Issues: Building trust between buyers and sellers can be challenging,
especially in peer-to-peer auctions.
5. Payment Security: Ensuring secure payment methods and protecting
sensitive financial information is crucial, as online auctions can be targets
for cybercrime.
Types of Web auctions:
1. English auctions: English auctions are where bids are announced by either
an auctioneer or by the bidders and winners pay what they bid to receive the
object. The common operational method of the format is that it is an
ascending bid auction in which bids are open for all to see.
2. Dutch auctions: Dutch auctions are the reverse of English auctions whereby
the price begins high and is methodically lowered until a buyer accepts the
price.
3. First-price sealed-bid: First-price sealed-bid auctions are when a single bid
is made by all bidding parties and the single highest bidder wins, and pays
what they bid. The main difference between this and English auctions is that
bids are not openly viewable or announced as against to the competitive
nature which is created by public bids.
4. Vickrey auction: A Vickrey auction, sometimes known as a second-price
sealed-bid auction, uses much the same principle as a first-price sealed bid
the highest bidder and winner will only pay what the second highest bidder
had bid.
5. Reverse auction: Reverse auctions are where the roles of buyer and seller
are reversed Multiple sellers compete to obtain the buyer's business and
prices typically decrease over time as new offers are made.
6. Shill bidding: Placing fake bids that benefits the seller of the item is known
as shill bidding, this is a method often used in online auctions. This is seen as
an unlawful act as it unethically raises the final price of the auction, so that
the winning bidder pays more than they should have.

VIRTUAL COMMUNITIES:
A virtual community is a community of people sharing common interests, ideas,
and feelings over the internet or other collaborative networks. In a virtual
community group of individuals interact through specific social media, potentially
crossing geographical and political boundaries in order to pursue mutual interests
or goals.

Types of virtual communities:

1. Internet message boards - An online message board is a forum where people
can discuss thoughts or ideas on various topics. Online message centres
allow users to choose which thread, or board of discussion, users would like
 to read or contribute to. A user will start a discussion by making a post on a
thread other users who choose to respond can follow the discussion by
adding their own post to that thread.

2. Online chat rooms - Just after the rise of interest in message boards and
forums, people started to want a way of communicating with their
"communities" in real time. The disadvantage to message boards was that
people would have to wait until another user replied to their posting. The
development of online chat rooms allowed people to talk to whoever was
online at the same time they were. This way, messages were sent and online
users could immediately respond back.

3. Virtual worlds - Virtual worlds are the most interactive of all virtual
community forms. In this group of members form a online team and play
games against other online teams in certain games . Characters within the
world can talk to one another and have almost the same interactions people
would have in reality. GameTZ.com is an online game, music, movie, and
book trading community.

4. Social network services - Social networking services are the most prominent
type of virtual community. They are either a website or software platform
that focuses on creating and maintaining relationships. Face book, Twitter,
and Myspace are all virtual communities. With these sites, one often creates a
profile or account, and adds friends or follows friends.

Benefits of virtual community

1. More flexible or accessible 24 hours and 7 days any place anywhere as long
as internet connection.
2. Easy relevance: It gives a place to exchange a real life examples and
experience.
3. Community building: Over time can develop into a supportive,
stimulating community which participants come to regard as the high point
of their course.
4. Limitless: It can never predict where the discussion will go. The unexpected
often results in increased incidental learning.
5. Choice: A quick question or comment or a long reflective account is equally
possible.
Limitation of virtual community:
1. Overloading information: A large volume of information and messages
can be overload and hard to follow, even stress-inducing.
2. No physical documents: Any physical documents to any conversation,
without facial expressions and gestures or the ability to retract immediately
there's a big risk of misunderstanding.
3. Directionless: Participants used to having a teacher or instructor telling
them what to do can find it a leaderless environment.
4. Inefficient: It takes longer than verbal conversation and so it's hard to reply
to all the points in a message, easily leaving questions unanswered.
5. Threads: Logical sequence of discussion is often broken by users not
sticking to the topic.

WEB PORTAL
A web portal is a website that serves as a single point of access to a variety of
information, services, resources, and tools, often presented in a unified and user-
friendly interface. Web portals are designed to provide a gateway or portal-like
experience to users, helping them access specific information or perform various
tasks efficiently.

Types of Web Portal

1. Corporate Portals or Intranet Portals:
These portals are used within organizations to provide employees with a central
location to access internal information, documents, collaboration tools, and
company news. They enhance communication and streamline internal processes.
2. Government Portals (G2C or G2B):
Government portals offer citizens (G2C) and businesses (G2B) a single platform to
access government services, information, and resources. Examples include portals
for paying taxes, obtaining licenses, or accessing public records.
 3. Search Engine Portals:
Search engine portals like Google and Bing serve as gateways to the internet,
allowing users to search for information across the web. They often provide
additional features like news, email, and cloud storage.
4. News Portals:
News portals aggregate news articles, videos, and other media content from
various sources, offering users a centralized location for staying updated on current
events. Examples include CNN, BBC, and Yahoo News.
5. Healthcare Portals:
Healthcare portals allow patients to access medical records, schedule
appointments, communicate with healthcare providers, and receive health-related
information and resources. These portals enhance patient engagement and
streamline healthcare processes.
6. Educational Portals:
Educational portals provide students, teachers, and educational institutions with
access to learning materials, course management systems, and academic resources.
They support online learning and collaboration.
7. E-commerce Portals:
E-commerce portals like Amazon and eBay facilitate online shopping by offering a
wide range of products from various sellers. Users can search, compare, and
purchase items through these platforms.
8. Job Portals:
Job portals connect job seekers with employment opportunities posted by
employers and recruiters. Users can search for jobs, post resumes, and apply for
positions.
9. Real Estate Portals:
Real estate portals like Zillow and Realtor.com provide property listings, rental
information, and tools for buying, selling, or renting real estate.
10.Travel and Booking Portals:
Travel portals such as Expedia and Booking.com offer travelers a one-stop shop
for booking flights, hotels, vacation packages, and other travel-related services.
 11.Social Media Portals:
Social media platforms like Facebook, Twitter, and LinkedIn serve as portals for
social interaction, allowing users to connect, share content, and communicate with
others.
12.Financial Portals:
Financial portals provide access to banking services, investment tools, stock
market data, and financial news. Users can manage their finances, trade stocks, and
access financial resources.
13.Entertainment Portals:
Entertainment portals offer a wide range of multimedia content, including movies,
music, games, and streaming services like Netflix and Spotify.
14.Sports Portals:
Sports portals provide sports enthusiasts with news, scores, live streaming, and
other sports-related content and resources.

E- Business Revenue Model

E-business revenue models describe how online businesses generate income. These
models have evolved over time to accommodate the diverse range of products and
services offered online.
Types of e-business revenue models:
1. Advertising revenue model
In the advertising revenue model, a Web site that offers its users content, services,
and/or products also provides a forum for advertisements and receives fees from
advertisers. The Web sites that are able to attract the greatest viewership or that
have a highly specialized, differentiated viewership and are able to retain user
attention are able to charge higher advertising rates.
2. Subscription revenue model
In the subscription revenue model a Web site that offers its users content or services
charges a subscription fee for access to some or all of its offerings. For instance,
some of the e-books website provides access to download any book only to
subscribers, who have paid monthly or annual subscription fee.
 3. Transaction fee revenue model
In the transaction fee revenue model, a company receives a fee for enabling or
executing a transaction. For example, e8ay provides an online auction marketplace
and receives a small transaction fee from a seller if the seller is successful in selling
the item.
4. Sales revenue model
In the sales revenue model companies derive revenue by selling goods,
information, or services to customers. Companies such as Flipkart, Amazon (which
sells books, music, and other products), and shoppersstop.corn, all have sales
revenue models.
5. Affiliate revenue model
In the affiliate revenue model sites that steer business to an "affiliate" receive a
referral fee or percentage of the revenue from any resulting sales. For example,
HDFC bank offers 5 reward point for every 100 rupees spent on the card. When the
consumer take advantage of an offer and make a purchase, members earn "points"
and these points can redeem for freebies.