Chapter 2

E-Commerce:
Mechanisms, Platforms, and Tools
 Learning Objectives
1. Describe the major electronic commerce (EC) activities and
processes and the mechanisms that support them.
2. Define e-marketplaces and list their components.
3. List the major types of e-marketplaces and describe their
features.
4. Describe electronic catalogs, search engines, and shopping
carts.
5. Describe the major types of auctions and list their characteristics.
6. Discuss the benefits and limitations of e-auctions.
7. Describe bartering and negotiating online.
8. Describe virtual communities.
9. Describe social networks as EC mechanisms.
10. Describe the emerging technologies of augmented reality and
crowdsourcing.
11. Describe Web 3.0 and define Web 4.0 and Web 5.0.
 Electronic Commerce
Mechanisms: An Overview
• EC Activities and Support Mechanisms
• The Online Purchasing Process
Figure 2.1 The EC activities–mechanism connection
 E-Marketplaces
• *E-Marketplace
• (1) enabling transactions to occur by providing a
meeting place for buyers and sellers; (2) enabling the
flow of relevant information; (3) providing services
associated with market transactions, such as payments
and escrow; and (4) providing auxiliary services such as
legal, auditing, and security
• Components of and the Participants in E-Marketplaces
o Customers
o Sellers
o Products and services
• * Digital Products
o Infrastructure
o *Front end
o * Back end
o * Intermediaries
 E-Marketplaces
• Blue Nile https://www.bluenile.com
o Large Discounts
o Huge selection of diamonds
o Quality rating & comparisons http://www.bizrate.com
• In order to sell $450 million in jewelry in 1 year, a traditional retail chain
needs over 300 stores and over 3,000 employees. Blue Nile does it with
one 10,000-square-foot warehouse and 193 employees. The company
also bypasses the industry’s complex supply chain, in which a diamond
may pass through five or more middlemen before reaching a retailer.
Because they are a large buyer, they can deal directly with original
• suppliers.

 Disintermediation and Reintermediation

• Types of E-Marketplaces
o Private E-Marketplaces
• Private e-marketplaces are those owned and
operated by a single company. starbucks.com ,
dell.com , target.com , and united.com sell from
their websites. Sell side (Daraz) Buyside (Walmart)
o Public E-Marketplaces
• Public e-marketplaces are in many cases B2B
markets. They often are owned by a third party (not
a seller or a buyer) or by a group of buying or selling
companies (referred to as a consortium ), and they
serve many sellers and many buyers.
• These markets also are known as exchanges (e.g.,
• a stock exchange).
 Customer Shopping Mechanisms: Webstores,

Malls, And Portals

• *Webstore https://www.samsung.com/pk/
o Microsites
o A microsite is an individual web page or small cluster of web pages that
act as a separate entity for a brand. ... Microsites can be used to help
brands achieve a number of things. For example, some companies
have used them to highlight a specific campaign or target specific buyer
personas. https://www.readz.com/6-microsite-examples
o http://burgerbff.com/ Microsite of Mellow mushroom
o http://www.nikon.pk/en_PK/learn_and_explore/microsite
• Electronic Malls https://www.etsy.com/
• Portal : A portal is an information gateway that is used in e-marketplaces, webstores, and
other types of EC (e.g., in e-collaboration, intrabusiness, and e-learning).
• Web (Information) Portals
o Types of Portals
• Commercial (public) portals yahoo.com
• Corporate (private) portals
• Publishing portals
• *Mobile portals
• *Voice portals
• Knowledge portals
• Communities' portals
Corporate Portal
https://pgsupplier.com/en-US
How a Portal Works
Customer Shopping Mechanisms:
Webstores, Malls, And Portals
• The Roles and Value of Intermediaries in
E-Marketplaces
o Brokers https://www.ebay.com
o Distributors in B2B
https://www.grainger.com
Merchant Solutions: Electronic Catalogs,
Search Engines, and Shopping Carts
• *Electronic catalogs (e-catalogs)
• EC Search Activities, Types, and Engines
o Types of EC Searches
• Internet/Web Search
• Internet/Web Search
o *Enterprise Search
• *Desktop Search
 Paper catalog

Advantages

– Easy to create,
– reader can look at it without computer system,
– More portable than computer

Disadvantages

– Difficult to update
– Only a limited nos of products can be displayed
– Limited info
– No advanced multimedia eg voice, graphics

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 Online Catalog
• Easy to update information
• Able to integrate with purchasing process
• Good search and comparison process
• Timely and up to date info
• Give globally broad range of products info
• Adding on voice and animations
• Long term cost saving
• Easy to customize
• More comparative shopping
• Easy to connect order processing-inventory processing
and payment procedure
• Customer has to have the computer system
(disadvantage)
http://www.silkstream.net/blog/2010/12/virtual-electronic-
catalogue-brochure-examples.html
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Merchant Solutions: Electronic Catalogs,
Search Engines, and Shopping Carts
o *Search Engines
o Voice-Powered Search
o Video and Mobile Search
• Mobile Search
o Visual Shopping Search Engine
o Social Network Search Engines

• *Shopping Carts
o Product Configuration (Self Customization)
o Questions and Answers Online
 Electronic Catalogs,
Search Engines, and Shopping Carts
• desktop search
Search tools that search the contents of a user’s or organization’s
computer files, rather than searching the Internet. The emphasis is on
finding all the information that is available on the user’s PC, including
Web browser histories, e-mail archives, and word-processed documents,
as well as in all internal files and databases

• search engine
A computer program that can access databases of Internet resources,
search for specific information or keywords, and report the results
o Software (Intelligent) Agents
o Voice-Powered Search

• electronic shopping cart

An order-processing technology that allows customers to accumulate
items they wish to buy while they continue to shop
o Product Configuration

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 Auctions, Bartering,
and Negotiating Online
• Auction
A competitive process in which a seller solicits
consecutive bids from buyers (forward auctions) or
a buyer solicits bids from sellers (backward
auctions). Prices are determined dynamically by
the bids
• electronic auctions (e-auctions)
Auctions conducted online
o Innovative Auctions

o https://www.toptenreviews.com/best-online-auction-sites

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 Auctions, Bartering,
and Negotiating Online
• dynamic pricing
Prices that change based on supply and demand
relationships at any given time
o One Buyer, One Seller
o One Seller, Many Potential Buyers
• forward auction
An auction in which a seller entertains bids from buyers.
Bidders increase price sequentially
• reverse auction (bidding or tendering system)
Auction in which the buyer places an item for bid (tender)
on a request for quote (RFQ) system, potential suppliers bid
on the job, with the price reducing sequentially, and the
lowest bid wins; primarily a B2B or G2B mechanism
• “name-your-own-price” model
Auction model in which a would-be buyer specifies the
price (and other terms) he or she is willing to pay to any
willing and able seller. It is a C2B model that was
pioneered by Priceline.com
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 Auctions, Bartering,
and Negotiating Online
o Many Sellers, Many Buyers
• double auction
An auction in which multiple buyers and their bidding prices are
matched with multiple sellers and their asking prices, considering the
quantities on both sides

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 Auctions, Bartering,
and Negotiating Online
o Limitations of E-Auctions
• Minimal Security
• Possibility of Fraud
• Limited Participation
o Impacts of Auctions
• Auctions as a Coordination Mechanism
• Auctions as a Social Mechanism to Determine
a Price
• Auctions as a Highly Visible Distribution
Mechanism
• Auctions as an EC Component
Auctions
Publishing as•Prentice for Profit for Individuals
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 Auctions, Bartering,
and Negotiating Online
• ONLINE BARTERING
o Bartering http://barterdepot.com/
The exchange of goods and services
o e-bartering (electronic bartering)
Bartering conducted online, usually in a bartering
exchange
o bartering exchange
A marketplace in which an intermediary arranges barter
transactions
• barterdepot.com . The typical bartering process works like this: First,
the company tells the bartering exchange what it wants to offer. The
exchange then assesses the value of the company’s products or
services and offers it certain “points” or “bartering dollars.” The
company can use the “points” to buy the things it needs from a
participating member in the exchange.

• ONLINE NEGOTIATING https://www.ioffer.com

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 Web 2.0 Tools and Services:
From Blogs to Wikis
• BLOGGING (WEBLOGGING)
o blog
A personal Web site that is open to the public to read and to interact with;
dedicated to specific topics or issues
o vlog (or video blog)
A blog with video content
o micro-blogging
A form of blogging that allows users to write messages (usually up to 140
characters) and publish them, either to be viewed by anyone or by a
restricted group that can be chosen by the user. These messages can be
submitted by a variety of means, including text messaging, instant
messaging, e-mail, MP3, or just on the Web
o Twitter
A free micro-blogging service that allows its users to send and read other
users’ updates.

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 Web 2.0 Tools and Services:
From Blogs to Wikis
o social bookmarking
Web service for sharing Internet bookmarks. The sites are a popular way to
store, classify, share, and search links through the practice of folksonomy
techniques on the Internet and intranets

• wiki (wikilog)
A blog that allows everyone to participate as a
peer; anyone may add, delete, or change content

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Virtual Communities and
Social Networks
• *Virtual Community
• Characteristics of Traditional Online
Communities and Their Classifications
o Classifications of Virtual Communities
• Public Versus Private Communities
• Classification Categories
• Online Social Networks and Social
Network Sites
o A Definition and Basic Information
 Virtual Communities and
Social Networks
• Social Network Services
o The Size of Social Network Sites
o A Global Phenomenon
o Representative Capabilities and Services
Provided by Social Network Sites
• Business-Oriented Public Social Networks
o *Business-oriented social networks
o Example of a Business-Oriented Social Network
o Some Capabilities of Business-Oriented Networks
• Private (or Enterprise) Social Networks
Virtual Communities and
Social Networks
• Business Models And Services Related To
Social Networking
• Mobile Social Commerce
• *Mobile Social Networking
• Mobile Enterprise Networks
o Examples of Social Mobile Commerce
Applications
• Recent Innovative Tools And Platforms For
Social Networking
o Mobile Community Activities
 Virtual Worlds As an
Electronic Commerce Platform
• *Virtual World
https://community.secondlife.com/knowledgebase/english/

• Major Features
• *Avatars Animated computer characters that exhibit
humanlike movements and behaviors

• Business Activities and Value in Virtual

Worlds
o Virtual Shopping
o Trading Virtual Properties
 Emerging EC Platforms: Augmented
Reality And Crowdsourcing
• *Augmented Reality
• https://www.adobe.com/insights/5-realworld-examples-of-
augmented-reality-innovation.html
• https://www.youtube.com/watch?v=5TZmQPdhpak
• https://www.youtube.com/watch?v=VaKWVFoeHvw
• Applications in E-Commerce
• *Crowdsourcing
o Definitions and Major Concepts
o The Process of Crowdsourcing
o Benefits of Crowdsourcing
o Uses of Crowdsourcing in E-Commerce
The Elements of Crowdsourcing
A Typical Crowdsourcing Process
The Future: Web 3.0, Web
4.0, and Web 5.0
• Web 3.0: What Does the Future Hold?
o *Web 3.0
o Web 3.0 and the *Semantic Web
o Concerns
• Future Threats
o Security concerns
o Lack of Net neutrality
o Copyright complaints
o Insufficient connectivity
• Language Fitness
• Standards
The Future: Web 3.0, Web
4.0, and Web 5.0
• The Technological Environment
o McKinsey & Company’s Prediction
o Nicholas Carr’s Predictions
o *Web 4.0
o Web 5.0
 Managerial Issues
1. Should we use auctions for selling?
2. Should we barter?
3. How do we select merchant software?
4. How can we use Facebook and other social
networks in our business?
 Summary
1. Activities and mechanisms.
2. E-marketplaces and their components.
3. The major types of e-marketplaces.
4. Electronic catalogs, search engines, and
shopping carts.
5. Types of auctions and their
characteristics.
6. The benefits and limitations of auctions.
 Summary
7. Bartering and negotiating.
8. The structure and role of virtual
communities.
9. Social networks as EC mechanisms.
10.Virtual worlds.
11.Augmented Reality (AR) and
crowdsourcing.
12.Web 3.0 and Web 4.0.