—

E-Business, E-Commerce,
and M-Commerce
This unit explains the concepts of e-business, e-commerce,
and m-commerce and their relevance to business organizations
and consumers. It also includes real-world examples to
demonstrate concepts clearly.

UNIT OUTLINE
4.1 Introduction to E-Business
4.2 E-Commerce Fundamentals
4.3 Basics of M-Commerce
4.4 Differences between E-Business and E-Commerce
4.5 Differences between E-Commerce and M-Commerce
4.6 Guidelines and Laws Governing E-Commerce
4.7 Real-world Examples of E-Commerce and M-Commerce
4.8 Case Study

LEARNING OBJECTIVES

At the end of this unit, the student should be able to:

1. define e-business and its contributions to business

organizations;
2. differentiate e-commerce from m-commerce;

3. understand and apply e-business models in designing

e-commerce websites for business organizations; and

4, describe the challenges, barriers, and_ ethical

implications involved in the adoption of e-business in
business organizations.

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 HT APPLICATION TOOLS IN HUSTNESS

4.1 INTRODUCTION TO E-BUSINESS

The Internet (International network) is a large network used
by business organizations to establish e-business and e-commerce
websites. Computers connect to each other through the Internet,
lt provides business organizations opportunities to build
relationships with their customers and suppliers to help improve
services and customer retention. Customers and suppliers are
encouraged to use e-business services as a new and convenient
channel to do business transactions online.
The World Wide Web (WWW) provides unrestricted access
to and publishing of information over the Internet using web
browsers.

E-Business

E-business refers to any online-run business. It is also

considered as a technique used by business organizations to
improve business strategy and be more productive and profitable
through the use of IT.

Computer Networks
A computer network refers to the connection between
computers to share information and resources. The different types
of computer networks are as follows:
a. Personal Area Network (PAN). This refers to a
computer network that is used to allow communication
between devices close to each other. Examples of
devices that use PAN are printers, scanners (e.g.:
barcode scanners), personal digital assistants (PDAs),
and game console. The allowable distance for these
devices to connect ranges from 20 to 30 feet or
approximately six to nine meters away from each other.
 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

b, Local Area Network (LAN). This is one of the most

commonly used computer networks that cover a small
area such as a house, room, or building.
c, Campus Area Network (CAN). This type of
computer network is specifically used for academic
institutions where LANs are interconnected in a limited
geographical area.
d. Metropolitan Area Network (MAN). This type of
computer network is within the area of a town or city
where it connects two or more LANs or CANs.
e. Wide Area Network (WAN). This type of computer
network is used within regional or national areas.
f. International Network (Internet). This is considered as
the largest computer network that allows users to access
without restrictions.

Networks Used For E-Business

a. Intranet. It refers to the internal network of a business
organization, meaning only authorized users can access the
network through the Internet. It uses web browsers and file
transfer applications, which are under the supervision and
control of the business organization.
Extranet. It refers to the network of a business organization
that has a limited scope, giving access only to trusted
entities. For example, a business organization may build an
extranet by letting its customers gain access to a portion of
their intranet.
Internet. It is the largest network consisting of
interconnected government, private, public, academic, and
business entities linked by various technologies ranging
from electronic and wireless to fiber optic. This connection is
offered and managed by service providers.
 IT APPLICATION TOOLS IN BUSINESS

E-Business Opportunities
At the present, almost everyone uses the Internet. With
the use of e-business, small and large business organizations
are provided with great opportunities to compete in the global
market. E-business has the ability to transmit and transform
business information and use it to achieve competitive advantage,
Furthermore, it is designed to meet the needs of a business
organization's customers.
According to a research study conducted by Evans and
Wurster entitled Strategies and the New Economics of Information
(1997), there are three basic characteristics of information when
combined with internet technologies, namely, reach, richness,
and affiliation.
1. Reach. It refers to the potential number of local and
international customers of a business organization
that can interact with each other through the use of
the Internet. Reach can also be defined as the number
of categories and products that can be covered ina
consumer interface. This includes catalogues, websites,
and so on.
2. Richness. It refers to the information that business
organizations can share to their consumers. This may
include detailed information about a certain product
which includes the product name, description, price,
and availability. Business organizations should maintain
the accuracy, reliability, and security of the information
transmitted through communication channels to prevent
issues in the future.
3. Affiliation. It refers to the effectiveness of the linkages
between business organizations. In terms of online
partnerships, the business organizations with more

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

linkages to other organizations are able to gain more

influence and reach. For example, Google, Yahoo!,
and eBay have tremendously and successfully formed
partnerships that provide them diverse information, thus
making them the leading online businesses today.
In addition, business organizations have the opportunity to
build a strong and closer relationship with their existing customers
online to achieve customer retention. To promote better customer
service, business organizations are encouraged to use online
platforms, such as e-business and e-commerce, in offering high-
quality services to customers and giving them a convenient
channel to purchase products and services.

Risks and Barriers to E-Business Adoption

E-business services open a lot of opportunities to business
organizations. However, these opportunities need to be balanced
against the risks that may arise when conducting e-business.
These risks may include strategic and practical risks. An example
of a strategic risk is when a business makes a wrong decision
to invest in e-business. Many companies gain a competitive
advantage, but others invest too much and fail which may possibly
be caused by inappropriate approaches and execution.
On the other hand, there are also practical risks associated
with e-business which, if not addressed, could hurt a business.
For example, poor customer service manifested through slow or
no connection, unsecured systems, issues on privacy and data
protection, problems with online orders, and neglected customer
emails.

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 IT APPLICATION TOOLS IN BUSINESS

4.2 E-COMMERCE FUNDAMENTALS

—————

Electronic commerce, also known as e-commerce, refers

to commercial transactions executed online using the Internet.
E-commerce is displayed through technologies such as:
e Automated data collection systems
e Electronic funds transfer
e Electronic data interchange
e Internet marketing
e Inventory systems
¢ Online transaction processing
e Mobile commerce
¢ Supply chain management
E-commerce uses the World Wide Web (WWW) for its
transactions. Examples of using e-commerce are the sharing
of business information, supporting of business relationships,
and managing and monitoring of business transactions using
computers that are connected to a telecommunication network.

FIGURE 4.1 Food delivery service made possible

through online business transaction

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

However, using e-commerce has its advantages, disadvantages,

and threats.

Buy-Side and Sell-Side E-Commerce

The difference between buy-side e-commerce and sell-side
e-commerce is that the former focuses on suppliers, and the latter
focuses on the consumers or customers.
Sell-side e-commerce has four types of online presence, and
each type has its own objective and market. These types of online
presence include transactional and e-commerce websites, portal
or media websites, brand building websites, and service oriented
websites. Many of the business organizations today combine one
or more types to capture the real market and audience.

Advantages of E-Commerce
Efficient transactions done anytime and anywhere
Quick electronic funds transfer .
Convenient buying or selling from home or place of
business
Reduced cost and time of order processing
Simpler, faster, and cheaper supply chain management
Quick reaching of target customers for small- and medium-
sized enterprises (SMEs)
User-friendly ordering systems

Disadvantages of E-Commerce
Lack of privacy of e-transactions
Unsecured use of the Internet (presence of viruses, hackers,
and so on)
Depersonalized shopping

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 IT APPLICATION TOOLS IN RUSINESS

Threats of E-Commerce
e Servers containing important files and customer information
being stolen
e |mpostors duplicating e-commerce sites to steal customers’
money
e Hackers attempting to steal customer information or mess
up the site
e Authorized users with hidden motives attacking e-commerce
systems and/or selling information to competitors

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Features of E-Commerce
The following are the features of e-commerce that must be
checked and considered when managing such type of business or
company:
1. Ubiquity
This means that the marketable transaction or
activity is accessible at any time, anywhere in the world.
 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

Global Reach and Security

E-commerce allows a company to get customers
anywhere in the world. Global reach, also known as
worldwide access, is the maximum number of possible
consumers a business can reach. Security is essential
when working globally; therefore, customer information
and privacy must be protected and ensured when using
an e-commerce platform.
Universal Standards

This refers to a website that can be operated on

a standard platform which follows identified methods
and systems. This employs an easy-to-use e-commerce
website with a simple design and content.
Richness

This refers to the volume of the content of the

website and the way it is used by consumers. Ensuring a
site's richness, by providing a combination of messages
and means to improve customer experience, is essential
for businesses. Videos, pictures, texts, sounds, and links
can be used to improve customer experience.
Interactivity
This feature refers to the relationship between a
consumer and an e-commerce website. It provides
face-to-face customer meetings when conducting
business transactions. Increased interactivity allows for
the establishment of an emotional connection between
consumers and the business, thus helping build brand
trust and loyalty.
Information Density
This refers to the amount of products that can fit
on a computer screen. There is no given standard for an
e-commerce website's information density.

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 IT APPLICATION TOOLS IN BUSINESS

Business Models of E-Commerce

The following are the general classifications of e-commerce

business models:
1. Business-to-Business (B2B)
B2B is a marketing type of business wherein
businesses provide products or services to other
businesses for the production of goods, business
operations, or reselling of products. An example of
a B2B transaction is a wholesaler selling products to
a retailer.

Business Organization

Supplies Order
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Processing

Orders
_ Website

FIGURE 4.3 B2B business model

B2B simply refers to e-commerce between

different business organizations, which could result
in the establishment of good relationships between
them. Experts predict that this type of e-commerce
will continue to grow in the future and could possibly
surpass the business-to-consumer model.
 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

Examples of B2B websites in the Philippines are:

e Philippine Companies — Filipino Business
Directory
It was launched in 2007 by EACOMM
Corporation. Its main objective is to help
people get answers for daily life questions
such asa list of all coffee shops in Manila or a
list of all schools in Intramuros.
This business constructs its database
from various public directories. One of its
features include daily updates of new data
entries. Their growing database makes them
one of the largest business directories in
the Philippines.

F |
) PhilippineCompanies

2.9. "Japanese Restaurant’, "High School’, "Lawyer"

8.9. "Davao Cy", “Quiapo, “Negros”

FIGURE 4.4 Philippine Companies as an example of a B2B model website

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 IT APPLICATION TOOLS IN BUSINESS

e Pinoy Listing
This website provides a free listing of
Filipino businesses ranging from markets and
restaurants to embassies and organizations,
including businesses that deliver products and
services to homes.
During 2017, Pinoy Listing reached 1,300
visitors and earned 10,660 views per day.

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e Yalwa

Founded in 2006, it is a global website

that provides a descriptive directory for
businesses of varying industries. It can be
accessed using two websites: http://www.
yalwa.com (for international access) and
http://www.yalwa.ph (for Philippine access).

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

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Yalwa also provides a platform for

customer ratings. These user ratings help
future buyers choose what products/services
to avail.

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FIGURE 4.7 Yalwa Philippines as an example of a B2B model website

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 IT APPLICATION TOOLS IN BUSINESS

2. Business-to-Consumer (B2C)

B2C is the type of commercial transaction in

which businesses sell products or services directly to
consumers.

Business Organization

Supplies Order

f= mae
Processing

Website

FIGURE 4.8 B2C business model

B2C is considered the most popular form of

e-commerce. It is the second largest model of
e-commerce. B2C originated in e-retail wherein a
customer visits a website and purchases products
online. It reduces transaction costs, increases the
number of consumers, and allows consumers to find
the most competitive price of a certain product.
One of the most popular websites for the B2C model
is Amazon.com.

B2C includes the purchasing of both physical

and information goods. Examples of physical goods
are tangible products such as books, laptops, mobile
phones, and car accessories, whereas examples of
information goods are e-books and software.
In the Philippines, the following are the top
e-commerce websites:

¢ Lazada Philippines
° Shopee Philippines

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

e Zalora Philippines
e Metrodeal
e Globe Online Shop
¢ eBay Philippines

3. Consumer-to-Consumer (C2C)
C2C is used similarly as the classified advertising
section of a local newspaper or an auction page. C2C is
a convenient way for consumers to buy and sell goods
without physically going to a store.

Places advertisement

Website

Want to sell products Want buy products

receives products

Customer 1

receives money

FIGURE 4.9 C2C business model

4. Business-to-Government (B2G)
B2G is a business model that refers to a business
that sells products, services, or information to
governments and/or government agencies. This B2G
model provides a means for businesses to bid on
government projects or products that are needed for
their organizations, such as the Land Transportation
Office (LTO) with their license cards and plate numbers,

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 IT APPLICATION TOOLS IN DUSINESS

Commission on Elections (COMELEC) with their PCOS

machines used during elections, and so on.

Business Organization | => Website ==>

FIGURE 4.10 B2G business model

5. Government-to-Business (G2B)

This business model refers to government

agencies that provide services or information to a
business organization. A B2G model website is used
by the government to approach and communicate
with business organizations. Examples of B2G model
websites are those that support auctions, as well as
bender and application submissions.

E=> Website E> | Business Organization

FIGURE 4.11 G2B business model

6. Government-to-Citizen (G2C)

This model is being used by the government to

approach and communicate with citizens in general.
The type of website this model implements provides
services such as birth registration, the acquisition of
marriage and death certificates from the Philippine
Statistics Authority (PSA), or car registration from the
Land Transportation Office (LTO), and others.

FIGURE 4.12 G2C business model

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

The main purpose of the G2C model is to reduce

the average time needed for fulfilling citizens’ requests
for various government services.

E-Commerce Security Systems

Security is a fundamental part of any operation taking place
over the Internet. Customers will lose their faith in e-business if its
security is breached. The following are indispensable conditions
for safe e-payments and/or transactions:
1. Auditability — data should be documented in such a
way that it can be audited for the real requirements.
Authenticity - there should be procedures to
authenticate a user before giving him/her access to the
required information.
Availability — it is a requirement that information must
be available anytime and anywhere, and it must be
bound by a time limit.
Confidentiality — information should be kept and not
be accessible by an unauthorized user. It should not be
interrupted during the transmission.
Encryption — information must be secured through the
encryption and decryption of an authorized user.
Integrity — information must not be modified during its
transmission over a network. Honesty and strong moral
principles must be applied.
Non-reputation — there should be assurance that
someone cannot rebuff on something. It is to certify that
a person involved in the contract or in communication
cannot refute the authenticity of their signature on a
document.

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4.3 BASICS OF M-COMMERCE

Mobile commerce, also known as m-commerce, refers to
the use of wireless handheld devices, such as mobile phones,
to conduct business-related transactions online. M-commerce
transactions conquer online business transactions, which include
the purchasing and selling of a wide range of products and
services, online banking, bills payment, and information delivery.

FIGURE 4.13 The evolution of mobile technology

Figure 4.13 demonstrates the evolution of mobile technology,

starting with analog telephones to digital smart watches.
The capabilities of a mobile phone have enormously evolved
since it was introduced in the 1980s. Data transfer range has also
progressed from analog cell phones with 1G to the 4G of today's
mobile phones. Many consumers still use the GSM technology
(2nd generation), which does not allow any Internet access.
However, there are consumers who use the 2.5G web access and
3G or 4G phones that allow access to even broadband speed
Internet access.

In today’s generation, mobile technologies are widely used

to access the Internet and do online transactions using mobile
phones. For several years, mobile phones are designed primarily

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

for sending text messages as a means of communication.

However, through time, many features were added, including
video calls, access to mobile apps, and so on.
The following are benefits of mobile technologies:
1. Ubiquity. They allow users access anywhere.
2. Reachability. Users are easy to reach.
3. Convenience. There is no need for users to have fixed-
line connections.
4. Security. They ensure that user information is free from
the risk of loss or theft through authentication.
5, Privacy. The degree of privacy is higher compared to a
desktop PC.
6. Availability. Users can freely access them at any time of
the day.

Home About Blog Contact

- M-Commerce
Boost your onling purchases
discover naw Opportunites with our team

FIGURE 4.14 The concept of m-commerce shown through a mobile phone

Figure 4.14 demonstrates the concept of m-commerce

wherein customers can purchase something over the Internet
with the use of their mobile phones. Many business organizations

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 IT APPLICATION TOOLS IN BUSINESS

have converted their e-commerce portals into m-commerce.

For example, Facebook (www.facebook.com) can be accessed
through mobile devices because of the Wireless Application
Protocol (WAP).

M-Commerce Forces

The following are the four (4) main forces that support
m-commerce:
1. Fourth (4th) and Third (3rd) Generation Technologies

Fourth (4th) generation technologies, developed

in 2012-2015, with a maximum data transfer rate of
24 Mbit/s, adopted m-commerce. However, third (3rd)
generation technologies were introduced in 2004, with
a rate of 14.4 Mbit/s of maximum data transfer, and had
the adoption rate of 28% in both Europe and the US
according to Comscore.

2. Wireless Application Protocol (WAP)

This is a technical standard used for the transfer of
information to specific wireless devices, such as mobile
phones. It was introduced in 2000, and it displays
information and content in small screens like that of
mobile devices.

3. iMode Access Platforms

This is another form of mobile access that was

introduced by the Japanese. Its so-called Japanese
iMode standard displays content using HTML. The most
popular iMode downloads are ringtones, music, and
dating services.

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

4. Personalized Services
Mobile phone users have increased tremendously
over the past years. Consumers can gain access to
wireless service whenever there is an available network.
Mobile operators are able to detect a user's specific
location and identification. Personalized services that
can be used anytime are offered to mobile users.

Top M-Commerce Applications in the Philippines

Kemp and Moey (2019), in an article about e-commerce
in the Philippines, state that “the Philippines has the smallest
internet economy” among six primary markets in Southeast Asia.
Furthermore, the amount Filipinos spend on online purchases is
$4.7 billion, and they spend $3.5 billion on travel purchases and
$840 million on electronics and physical media.
In May 2019, it is reported that Shopee and Lazada were
the dominating m-commerce applications in the country. The
following are the top m-commerce applications in the Philippines:
1. Lazada
2. Shopee
3. Zalora
4. Amazon
5. AliExpress
6. BeautyMnl
7. eBay
8. Sephora
9. Alibaba
10. Althea

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4.4 DIFFERENCES BETWEEN E-BUSINESS AND E-COMMERCE

E-commerce and e-business are two evolving methods of
conducting business that are gaining importance with the passage
of time. IBM defined e-business as “the transformation of key
business processes through the use of Internet technologies.”
These key business processes involve marketing, research,
logistics, manufacturing, and supply chain management. On the
other hand, e-commerce is best described as the buying and
selling of goods around the web, which is commonly known as
online transactions.
E-commerce is a subset of e-business because the majority of
the transactions done in e-commerce are also part of e-business,
such as ordering, paying, purchasing, and so on. The main
differences between the two are the end-user and integration.
E-business refers to the conduct of business using Internet
technologies. It does not focus on buying and selling alone but
providing services to customers and collaborating effectively
with business partners. Table 4.1 shows the comparison between
e-business and e-commerce.

q wii
FIGURE 4.15 Concept of collaboration between
between businessmen using Internet technologies.

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

TABLE 4.1 Difference between e-business and e-commerce

Basis for E-Commerce E-Business

Comparison
Definition Trading of Running a business using
merchandise __ | the internet
over the
Internet
Focus on monetary Yes No
transactions
Type of transactions | Commercial Business transactions
camied out transactions
Requirements Website or Website, customer
mobile app relationship
management,
enterprise resource
planning, supply chain
management

Required network Internet Internet, intranet,

and extranet
Source: Surbhi, S. (2018, August 2). Difference between e-commerce and
e-business. Retrieved from https://keydifferences.com/difference-between-e-
commerce-and-e-business.html

45 DIFFERENCES BETWEEN E-COMMERCE AND M-COMMERCE

——

Technology has helped make people's lives better. With the

use of the Internet, everything is available at one’s fingertips.
Purchasing products no longer requires physical appearances
in stores owing to technologies such as e-commerce and
m-commerce.
M-commerce refers to the operation of business transactions
through the Internet using mobile devices, such as smartphones,
while e-commerce makes use of computer desktops or laptops.

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 E-BUSINESS, E-COMMERCE, AND M-COMMERCE

TABLE 4.1 Difference between e-business and e-commerce

e r 4

oer ie E-Commerce E-Business

Comparison
Definition Trading of Running a business using
merchandise _ | the internet
over the
Internet
Focus on monetary __| Yes No
transactions
Type of transactions | Commercial Business transactions
carried out transactions
Requirements Website or Website, customer
mobile app relationship
management,
enterprise resource
planning, supply chain
management
Required network Internet Internet, intranet,
and extranet
Source: Surbhi, S. (2018, August 2). Difference between e-commerce and
e-business. Retrieved from https://keydifferences.com/difference-between-e-
commerce-and-e-business.html

4.5 DIFFERENCES BETWEEN E-COMMERCE AND M-COMMERCE

Technology has helped make people’s lives better. With the
use of the Internet, everything is available at one’s fingertips.
Purchasing products no longer requires physical appearances
in stores owing to technologies such as e-commerce and
m-commerce.
M-commerce refers to the operation of business transactions
through the Internet using mobile devices, such as smartphones,
while e-commerce makes use of computer desktops or laptops.

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 IT APPLICATION TOOLS IN BUSINESS

Accessing online shops using smartphones can be done anytime

and anywhere as long as the WiFi, 3G, or 4G signal is available.
Table 4.2 discusses the differences between e-commerce and
m-commerce,

TABLE 4.2 Difference between e-commerce and m-commerce

Web World (E-Commerce) Mobile World (M-Commerce)
Intemet access through a M-commerce is done through
laptop or desktop is necessary wireless connectivity using mobile
for e-commerce. devices.
The buying and selling of products The buying and selling of products
and services are done with the use and services are done with the use
of the Internet. of mobile phones that have access
to the Internet or cellular data.
It requires devices such as It requires devices such as
computers and laptops. cellphones, iPads, and tablets.
The platforms used are webstores. The platforms used are web stores
(mobile version/web app), hybrid
app, and native app.
Mobility is limited as you cannot As mobile devices are easy to
carry computers everywhere. Even carry, it offers more mobility,
with the use of laptops, one needs accessibility, and convenience.
enough space, and although it
is portable, it is not as light as
mobile phones.
It is less costly as the store is It is costly as a mobile app is
created on the web and can be required, and cellular data or
accessed using the Internet. Internet use is necessary.
As it is applicable to a broader Mobile devices are usually owned
area, customization for each user by an individual, so anyone can
is not possible. use the customized app to fulfill
their business or personal needs.
Its interface is more complicated, It promotes easy use because all
and more functions are available the functions are simplified.
Source: Bhargava, K. (2017). What is the difference between eCommerce and
mCommerce? Retrieved from https://medium.com/magenative/key-differences-
between-e-commerce-and-m-commerce-ecf880f6d261

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4.6 GUIDELINES AND LAWS GOVERNING E-COMMERCE

Having a plan is essential for building an online store. There
are limitations and guidelines to be followed when implementing
e-commerce, and planning beforehand saves a company time and
resources.
The following are challenges that may interfere with starting
an online business:
1. Taxes
Every state and/or country has different rules and
laws regarding taxes. Therefore, conducting research
and understanding your target market are necessary to
avoid problems about taxation.

2. Trademarks, Patents, and Copyrights

There are misconceptions about the definitions
of the three above-mentioned words, especially with
each one of them having different legal implications.
The United States Patent and Trademark Office provides
the following definitions for the three words:
¢ Trademark. It is a distinguishing word,
phrase, symbol, and/or design that identifies
the uniqueness of a product or service of one
party from the others,
¢ Patent. It is a property right granted by
the US Patent and Trademark Office to an
invention for its public disclosure for a limited
period of time.
¢ Copyright. It protects works of authorship,
such as writings, music, and works of art, that
have been tangibly expressed.

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3. Shipping Restrictions
Shipping companies have different restrictions on
products or goods. Doing research will help identify
which shipping companies could best serve a business.
The following are products typically restricted for
shipping:
a. Air bags
b. Animals
c. Perishable materials, such as fresh fruits and
vegetables and alcohol
d. Hazardous materials, such as aerosols,
ammunition, cigarettes, dry ice, explosives,
nail polish, perfumes, and poisons

Some companies allow the shipment of the

aforementioned items but require additional fees and
documents.

Inventory

There are certain rules and prohibitions that align

with lease, deed, or zoning codes when it comes to
stock inventory for businesses.
Business Restrictions

Different types of insurance exist for small

businesses such as general, product, professional,
and commercial liability insurances and home-based
insurance. The insurance depends on the location and
nature of a business.
For example, the product liability insurance is
meant for companies that are liable for the safety of
the products they manufacture, wholesale, distribute,
and retail.

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6. Licenses and Permits

A license is needed to sell products or services.
Licenses are dependent on the location of a business
and are distributed by a local licensing department.
7. Payment Card Industry (PCI) Compliance
PCI compliance serves as protection for online
businesses, especially software-as-a-service (SaaS)
e-commerce platforms, from problems such as data
theft.
Being PCI compliant also means having to avoid
the storage of oral and written information regarding
purchases. For example, keeping the card number of a
customer recorded on a phone call is prohibited.
Many business organizations face challenges in dealing
with security in e-commerce. Security is a fundamental part of
an e-commerce website that prioritizes the protection of data
regarding customers, finance, marketing, employees, and internal
business operations. Furthermore, the most important concern
of business managers in e-business or e-commerce is security
because it affects the quality of their service.
The Philippines has established laws and legal requirements
regarding the security of customer information. The following are
some of the relevant laws and legal requirements in the country
concerning customer security.
1. Republic Act 8792 — Electronic Commerce Act of 2000
This covers the mandates of the Philippine
government in terms of executing online transactions
locally or internationally.
2. Republic Act 10173 — Data Privacy Act of 2012
This prohibits the communication and sharing of
written, electronic, and recorded information by

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an individual to another. Information can be from

documents, e-books, electronic data messages, and
so on. The law involves the following three (3) main
individuals:
a. Data Subject. This refers to an individual whose
personal information is being processed.
b. Personal Information Controller. This
refers to an individual, person, or business
Organization that controls, holds, and
processes personal information and instructs
another individual, person, or business
organization to control, hold, and process the
personal information on his/her behalf.
c. Personal Information Processor. This refers
to a juridical person qualified to take action
under the act.

Consumer Protection Regulation - Transactions

through E-Commerce
The Department of Trade and Industry (DTI), with
the participation of other government agencies,
issued a consumer protection regulation that provides
protection to consumers when buying and selling
products and services through the use of e-commerce.
Tax Guidelines for E-Commerce Transactions in the
Philippines
On August 5, 2013, the Bureau of Internal Revenue
issued Revenue Memorandum Circular No. 55-2013,
Reiterating Taxpayers’ Obligations in Relation to Online
Business Transactions. The main purpose of this circular
is to remind individuals and business organizations to
handle sales and taxes properly when conducting online
transactions.

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4.7 REAL-WORLD EXAMPLES OF E-COMMERCE

~~ AND M-COMMERCE
E-Commerce Websites

1. Amazon

It is an American e-commerce website that gives users

an opportunity to buy products online worldwide.

FIGURE 4.16 Amazon website

2. eBay

It is an American e-commerce website that provides

various services to consumers such as auctions, online
payments, and online shopping.

FIGURE 4.17 eBay website

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3. Alibaba
It is a well-known Chinese company that is now part of
the global market of e-commerce. It specializes in retail, the
Internet, and technology.

FIGURE 4.18 Alibaba website

Examples of M-commerce
1. Mobile vouchers

FIGURE 4.19 Purchasirg of a gift voucher using a mobile app

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2. eToro mobile app. It is a platform that can be used to

invest in stocks or trading.

(s:

etoro?
V
FIGURE 4.20 eToro mobile app for investment

8 CASE STUDY

Phoebe Cosmetics Company

Aim
The aim of this case study is to allow students to demonstrate
tneir knowledge in e-business management, specifically its core
concepts and the techniques, application, and analysis of business
strategies.

Case Scenario

Phoebe Cosmetics Company is a newly established fashion

and cosmetics business located in the capital city of Manila.
This company is considered one of the largest retail cosmetic
companies in the Philippines. The company is currently facing

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various challenges in capturing their possible share in the market

because they are still implementing the old-fashioned method of
marketing, selling, and purchasing. As a new entrant in the world
of business and the cosmetic industry, the future of this company
is uncertain, especially given the fact that the cosmetic industry is
rapidly changing.
The top management of the company is in the process
of changing their marketing strategy to counter the highly
competitive environment. The company’s CEO, Ms. Phoebe,
explained that the company is struggling in terms of marketing
and is encountering a lot of problems in operation due to the
lack of their products’ exposure, use of a manual system in their
operations, lack of online presence, and e-commerce not being
introduced yet. In order to structure a new e-business strategy
for this company, the shareholders have decided to appoint an
e-business consultant with sound e-marketing experience. The
consultant will work toward building the online presence of
the business for better sales and improving marketing and
brand development. In addition, they also want to gather relevant
information on the importance of e-commerce and e-business
technologies and their contributions to improve company
operations and sales growth.

Questions

1. Suppose you are the newly appointed e-business consultant

for this company, prepare a report that discusses how
e-commerce and e-business technologies could be used to
improve company operations and sales.
2. Evaluate the current problem encountered by the company
and provide the best solution in order for them to be
successful in the cosmetic industry and in the market in
general. What marketing strategies would you recommend
to capture the local and international market?

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3. Propose an e-commerce website for Phoebe Cosmetics

Company and discuss its functionalities. What business
model/s would you implement for your proposed website
and why? What do you think are the challenges the
company may face when it comes to the implementation
of the proposed website in terms of the customers and the
company as a whole?
1 TPE