Outline

What is E- commerce
Between E- commerce and E- Business
Evaluation of E-Commerce
Factor Fueling E-Commerce
Need of E-Commerce
Limitation of E-Commerce

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Objective
To overview of introduction to E-commerce

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Definition
is a process of buying and selling of goods or services using electronic
systems.
E-Commerce is the buying and selling of goods and services via the
Internet.

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:Definition-2

According to the European Union’s Web site, e-commerce is a concept dealing with
any form of business transaction or information exchange executed using
Information and Communication Technology (ICT), between companies, companies
and their customers
According to IBM’s Web site, e-Business is defined as the concept of transforming
key business activities through the use of internet technologies.

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Bazaar.com
Deals in: Small business services sales

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Afghan-web.com
Deals in: Variety of clothing, music and books

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 Afghanonlinebazaar.com
Deals in: Ethnic and manner clothing

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Walakbaba.af
Deals in: Automobile logistics services
providers

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Afom.af
Deals in: Furniture, clothes and cell
phones

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 AzadBazar.af
Deals in: Clothing, furniture, music etc

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 AFGClassics.com
Deals in: Men and women clothing

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Afghancart.com
Deals in: Vehicles, real estate and
merchandise

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Difference Between E-Commerce & E-Business
E-business E-Commerce

Superset of e-commerce Subset of e-business

Deals with all aspects of business and not limited to More about monetary transactions,
just business transactions buying & selling

Internal processes such as production, inventory Focuses on the outward facing

management, product development, risk management, processes and not related to
finance, etc. internal processes

Other aspects of business like contacting the customer Does not include other business
online, educating him, providing services, and product aspects like in e-business
related information, that all constitute e-business
Did you know? J.P. Morgan annual forecast report estimates the value
of global e-commerce in 2010 at $680 billion worldwide and up to
18.9% in the form of revenue.
E-Commerce in the U.S. is expected to increase to $187 billion at13.2%.
J.P. Morgan predicts that global ecommerce revenue will increase to
$963 billion by 2013.

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Top 10 World Market
in 2018
Ranking Top E-Commerce company Annual Sales
1 China $672 Billion
2 United Stated $340 Billion
3 United kingdom $99 Billion
4 Japan $79 Billion
5 Germany $73 Billion
6 France $43 Billion
7 South Korea $37 Billion
8 Canada $30 Billion
9 Russia $20 Billion
10 Brazil MercadoLibre $19 Billion

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The three main processes enhanced in e-Business

Internal
management
Customer- processes
(a) Employee services
focused
processes
(b) Employee training
(c) Internal information-sharing
Production (d) Video conferencing
processes (e) Recruiting

a) Procurement
a) Promotional and marketing efforts
b) Ordering and replenishment of stocks
b) Selling over the Internet
c) Processing of payments
c) Processing of customers’ purchase orders
d) Electronic links with suppliers
and payments
e) Production control processes
d) Customer support

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Evolution of E-Commerce
◦ In 1970s, e-commerce applications were first developed with
innovations like Electronic Funds Transfer (EFT).
◦ Electronic Data Interchange (EDI) was introduced to electronically
transfer.
◦ E-Commerce of today started with the launch of the World Wide
Web (WWW) and browsers in the early 1990s.
◦ Internet/ Advanced Research Projects Agency Network emerged in 1969
◦ WWW and HTML were invented in 1989
◦ Mosaic browser was invented at the University of Illinois and released to
the public in 1993
◦ Netscape released the Navigator browser in 1994.
◦ Dell, Cisco, Amazon.com and others began to use the Internet
aggressively for commercial transactions in 1995.

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Factor Fuelling E-Commerce
1. Economic Factors: Economic efficiency is one of the most apparent benefits
of e-commerce.
a) Internal integration pertains to the electronic communication between
various departments, and the networking of business operations and
processes.
b) External integration is the electronic communication between
corporations, suppliers, customers or clients, and contractors.
2. Market and Customer Interaction Factors:-Organizations are encouraged to
use e-commerce in product promotion and marketing to capture international
markets.
3. Technology Factors: The key factor in the growth of ecommerce is the
development of ICT.

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Objective
After studying this chapter, you will be able to understand:
◦ To understand the advantages of E-Commerce
◦ To know the problem of E-Commerce

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Need for E-Commerce:

Advantages to
Consumers

Advantages to
Organizations

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Advantages to Organization

1. Global Reach

2. Reduction in Paper Costs

3. Reduction in Inventories (JIT)

4. Customization of Products or Services

5. Reduced Production Cycle Time

6. Improved Customer Service

7. Lower Sales and Marketing Costs

8. Lower Telecommunication Costs

9. New Business Partners

10. Faster Access to Information

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In 2018, an estimated 1.8 billion people worldwide purchase goods online. During the
same year, global e-retail sales amounted to 2.8 trillion U.S. dollars and projections
show a growth of up to 4.8 trillion U.S. dollars by 2021.

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Advantages to Consumers
• Increased Choice of Vendors and Products
• Convenience of Shopping at Home
• More Competitive Prices and Increased Price Comparison Capabilities
• Variety in Products and Services
• Greater Customization in the Delivery of Services (www.nytimes.com)
• Access to Greater Amounts of Information on Demand
• Quick Delivery of Digitized Products or Services
• Virtual Auctions

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 Disadvantages E-Commerce

Technical disadvantages Non-Technical disadvantages

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Technical Disadvantages:

Lack of universally accepted standards for quality, security, and reliability.

Insufficient telecommunications bandwidth.

Still-evolving software development tools.

Difficulties in integrating the Internet and EC software with some

existing applications and databases.

Need for special Web servers in addition to the network servers.

Expensive and/or inconvenient Internet accessibility for many would-be users.

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Non-Technical Disadvantages

Lack of national and international government regulations and industry

standards.

Lack of mature methodologies for measuring benefits of and justifying EC

Many sellers and buyers waiting for EC to stabilize before they take part.

Customer resistance to changing from a real to a virtual store. People do

not yet sufficiently trust paperless, faceless transactions.

Perception that EC is expensive and unsecured

An insufficient number of sellers and buyers exists for profitable EC

operation

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Conclusion
◦ Advantages to the organization
◦ Advantages for the customer
◦ Disadvantages

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Conclusion
A transaction occurs between a server and client. Server is the producer
of services/products and client is the consumer of services/products.
E-commerce helps organizations to reduce the cost to create process,
distribute and manage the paper based information by digitizing the
information.

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