CS7330

ELECTRONIC COMMERCE
Mustafa “Tokhi”

Lecturer,
Computer Science Faculty,
SALAMUniversity
Kabul, Afghanistan.
Previous Lecture
• Computer and Computer Network
• Introduction to Internet, Web & Their Growth
• Define E-Commerce and Describe How it Differs From E-Business
• Why we Study E-Commerce?
• Unique Features of E-Commerce
• Major Types and Dimensions of E-Commerce
The Revolution is Just Beginning
Chapter 1
Lecture Outline
• Origins and growth of e-commerce
• Potential limitations on growth of B2C e-commerce
• Visions, assessing, predictions & major themes of e-commerce
• Major academic discipline contributing to e-commerce research
• Case Study: Napster Rocked. But was it Legal?
Origins ‫ سرچشمه‬and Growth of E-commerce
• Precursors ‫پیش ماده‬
• 1970s, a pharmaceutical firm ‫ شرکت‬named Baxter Healthcare – B2B e-
commerce.
• Telephone-based system and expanded into PC-based entry system in 1980s.
• 1980s, Electronic Data Interchange (EDI) that permits‫ اجازه دادن‬firms to
exchange commercial documents.
• 1981s, French Minitel System that was a video text system.
• Telephone with an 8-inch screen and having over 13,000 different services.
• Private network owned by France Telecom.
Origins and Growth of E-commerce
• Beginning of E-Commerce
• 1995s, First sale banner advertisement – Netscape, Volvo, sprint etc…
• Since then, e-commerce has been the fastest growing form of commerce in
the US.
Origins and Growth of E-commerce
Growth of B2B

Sources: U.S. Census

Bureau, 2009b; authors’
estimates.
Origins and Growth of E-commerce
Growth of B2C

Sources: U.S. Census

Bureau, 2009b; authors’
estimates.
Origins and Growth of E-commerce

A commercial history
Potential Limitations on Growth of B2C
• Expensive technology.
• Sophisticated skill set.
• Persistent cultural attraction of physical markets and traditional
shopping experiences.
• Persistent global inequality limiting access to telephones and
computers.
Early Visions of E-Commerce
• Computer scientists
• Inexpensive, universal communications and computing environment
accessible by all.
• Economists
• Nearly perfect competitive market and friction-free commerce.
• Disintermediation, lowered search costs.
• Entrepreneurs
• Extraordinary opportunity for first movers.
• To create network effect.
Assessing E-Commerce
• Friction-Free commerce
• Information asymmetries persist
• Disintermediation
• First mover advantage
Benefits of EC
• Benefits to organization
• Expands the marketplace to national and international markets.
• Decreases the cost of creating, processing, distributing, storing, and
retrieving paper-based information.
• Reduces the time while distributing documents, information, receipt of
products, and services.
• Lowers telecommunications cost – the internet is much cheaper than value
added networks (VANs – in previous years network for transmitting data).
• Based on technical infrastructure.
• Allowing customization of products and services.
Benefits of EC
• Benefits to consumer
• Provides consumers with more choices.
• Enables consumers to shop or do other transactions 24 hours a day, all year round from almost
any location.
• Consumers can receive relevant and detailed information in seconds, rather than in days or weeks.
• Allows quick delivery of products and services.
• Makes it possible to participate in virtual sales.
• Facilitates competition, which results in large discounts
• Allows consumers to interact with other consumers in electronic communities and exchange ideas
as well as compare experiences.
• Provides consumers with less expensive products and services by allowing them to shop in many
places and conduct quick comparisons.
Benefits of EC
• Benefits to society
• Enables more individuals to work at home, and to do less traveling for
shopping, resulting in less traffic on the roads, and lower air pollution.
• Allows some merchandise to be sold at lower prices, benefiting less rich
people.
• Enables people in Third World countries and rural areas to enjoy products and
services which otherwise are not available to them.
Limitations of EC
• Technical Limitation
• There is a lack of universally accepted standards for quality, security, and
reliability.
• The telecommunications bandwidth is insufficient.
• Software development tools are still evolving.
• There are difficulties in integrating the Internet and EC software with some
existing applications and databases.
• Internet accessibility is still expensive and/or inconvenient.
Predictions for the Future
• E-commerce technology will continue to propagate through all
commercial activity, with overall revenues from e-commerce, the
number of products and services sold over the Web, and the amount
of Web traffic all rising.
• E-commerce prices will rise to cover the real costs of doing business
on the Web.
• Traditional well-endowed and experienced Fortune 500 companies
will play a growing and more dominant role.
Predictions for the Future
• Number of successful pure online stores will remain smaller than
integrated offline/online stores.
• The number of successful pure online companies will continue to
decline and most successful e-commerce firms will adopt an
integrated, multi-channel bricks and-clicks strategy.
• Regulation of e-commerce and the Web by government will grow
both in the United States and worldwide.
EC Organizing Themes
• Technology
• Understanding of IT upon which it is built including internet and WWW.
• Business
• Understanding business concepts such as electronic markets, information
goods, business models, firm and industry value chains, industry structure,
and consumer behavior in electronic markets.
• Society
• Understanding the pressure of EC on modern society.
• Primary issues – intellectual property, individual privacy, and public policy.
Academic Disciplines Concern with EC
• Technical Approach
• Computer Science
• They are concerned with the development of computer hardware,
software, and tele-communication systems, standard, encryption and
database design.
• Management Science
• They are interested in building mathematical model of business processes,
optimization of processes, opportunity to use Internet technology to
achieve efficient business operations.
Academic Disciplines Concern with EC
• Behavioral Approach
• Information Systems
• Data mining, Search engine design and AI.
• Economics
• Consumer behavior, pricing, and features of EC market.
• Marketing
• Brand development and extension, consumer behavior on web sites, using web
technology target different segment consumer groups.
Academic Disciplines Concern with EC
• Behavioral Approach
• Finance/Accounting
• Valuation and accounting practices.
• Sociology/Psychology
• Internet usage, the role social inequalities, use of web as a social network and group
communications.
Discussion Points
• Evaluation of E-Commerce.
• What techniques of privacy attack are usual through social media?
• How do you protect your privacy on the web?
• Is EC any different than traditional markets with respect to privacy?
Don’t merchant always want to know their customer?
• What impact has created by OLX in our society? Discuss the risks too.
• Why do you think investors today would like to interested in investing in
or purchasing EC companies? Would you invest in an EC company today?
Summery
• Evolution of E-commerce.
• Origins and growth of e-commerce
• Potential limitations on growth of B2C e-commerce
• Visions, assessing, predictions & major themes of e-commerce
• Major academic discipline contributing to e-commerce research
• Case Study: Napster Rocked. But was it Legal?
Thank You
For your Patience