INTRODUCTION TO

E-COMMERCE
E-commerce
business. technology. society.

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 LEARNING
OBJECTIVES
• Understand why it is important to study e-commerce.
• Define e-commerce, understand how e-commerce differs from e-business, identify the
primary technological building blocks underlying e-commerce, and recognize major current
themes in e-commerce.
• Identify and describe the unique features of e-commerce technology and discuss their
business significance.
• Describe the major types of e-commerce.
• Understand the evolution of e-commerce from its early years to today.
• Describe the major themes underlying the study of e-commerce.
• Identify the major academic disciplines contributing to e-commerce.

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What is Ecommerce
• “the use of the internet, the Web, mobile apps and browsers running on mobile devices to
transact business” (Laudon & Traver, 2022).
the buying and selling of goods and services over the internet.
• Key Features
• Online Shopping: Retail websites and marketplaces like Amazon, eBay, and Alibaba.
• Digital Payments: Credit cards, PayPal, cryptocurrencies, and mobile payment apps.
• B2C and B2B Models: Business-to-Consumer (B2C) and Business-to-Business (B2B)
transactions.
• Omnichannel Experience: Integration of online and offline shopping experiences.
• Global Reach: Ability to sell and buy across borders without physical limitations.

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E-Commerce History
• Ecommerce examples in 1995 includes companies such as Amazon, Google, Apple, and Facebook
• Now different type of online companies like Uber, Taxify, Airbnb, Takeaway and JustEat can be
seen
• On-demand service e-commerce business model has swept up billions of investment dollars
• Major industries, from transportation to hotels, real estate, house cleaning, maintenance,
and grocery shopping
• In 2019, over 2 billion consumers worldwide spent around $4.3 trillion, and
businesses around $27 trillion,
• There have been significant changes in the e-commerce environment during
this time period

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Early Beginnings (1960s - 1980s)
• Introduction of Electronic Data Interchange (EDI) in the 1960s
• Earliest implementation of EDI was transportation system in US
• EDI standards allowed businesses to share purchase orders, invoices, shipping notices, and other
commercial documents efficiently.
• Development of online transactions in the 1970s
• Development of standardized formats such as ANSI X12 and EDIFACT for broader industry-wide
integration.
• The rise of e-banking, early e-commerce systems, and the foundation of secure digital payment
methods.
• Electronic funds transfer (EFT)
• Automated Teller Machines (ATMs)
• Credit and Debit Cards
• EDI Standards
• Early online shopping
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Early Beginnings (1960s - 1980s)
• Birth of CompuServe in 1969
• one of the earliest online service providers founded in 1969 in Columbus, Ohio, as
Compu-Serv Network, Inc.
• Time-Sharing Service (1969–1970s): businesses rent computing power remotely.
• Entry into Consumer Services (Late 1970s)
• CompuServe developed one of the first commercial email systems
• real-time chat and bulletin board systems (BBS)
• By the 1980s, CompuServe had become a dominant force in online services

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Early Beginnings (1960s - 1980s)
• First electronic shopping system developed by Michael Aldrich in 1979 (a British
entrepreneur and inventor)
• Concept and Technology:
• Aldrich connected a domestic television set to a real-time transaction processing
computer using a telephone line.
• users can browse products and place orders electronically, eliminating the need for
paper-based transactions.
• Impact and Legacy:
• Although Aldrich’s system did not use the internet, it was a precursor to modern
online shopping platforms.
• His work influenced the development of e-commerce in the 1990s, with companies
like Amazon and eBay building upon similar digital transaction models.

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Early Beginnings
• in 2007, Apple introduced the first iPhone, a transformative event
that marked the beginning of yet another new era in e-commerce
• Soon mobile devices have become advertising, shopping, reading, and
media viewing machines
• social networks such as Facebook, Twitter, YouTube, Pinterest,
Instagram, and Snapchat, enabled users to distribute their own
content
• Rise of on-demand services

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 Emergence of the World Wide Web
(WWW) in 1991

The Rise Launch of Amazon (1994) and eBay

(1995)
of Online
Shopping
Secure Socket Layer (SSL) encryption
(1990s) introduced in 1994

Online banking and payment systems

began to evolve

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 Growth of online retail giants (Amazon,
eBay, Alibaba)

The 2000s
Introduction of PayPal in 1998 and rise
– of digital payments

Expansion
and Google AdWords launched in 2000,
transforming online advertising
Innovation
Mobile commerce (m-commerce) gains
traction

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 Rise of social media marketplaces
(Facebook, Instagram, Pinterest)

The 2010s
– Mobile Dominance of mobile shopping apps

and Social
Commerc Growth of subscription-based services
(Netflix, Spotify, Amazon Prime)
e
Advancements in AI-driven
recommendations and chatbots

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 Influence of COVID-19 on e-commerce
boom

The 2020s Growth of omnichannel retailing

– E-
Commerc
Expansion of AI, VR, and AR in online
e Today shopping

Cryptocurrency and blockchain in e-

commerce transactions

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 Predictions on AI, machine learning, and
automation

The Future The role of augmented reality (AR) in

virtual shopping
of E-
Commerc
Sustainability and ethical consumerism
e in e-commerce

The potential of Web3 and decentralized

commerce

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 Early Beginnings (1990s - 2000s)
The
History of Introduction of the internet in
E- Saudi Arabia in 1999
Commerc Early adoption of online banking
e in Saudi and digital transactions
Arabia
Limited online retail activity due to
infrastructure and consumer trust
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 Launch of major e-commerce
platforms like Souq.com (later
acquired by Amazon in 2017)
Growth
and Expansion of logistics and
payment gateways (STC Pay,
Developme
Mada, and SADAD)
nt (2010s)
Rise of mobile commerce and
increased smartphone
penetration
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 Saudi Vision 2030’s emphasis
on digital transformation

Governme
nt Support Development of fintech and
regulatory improvements for
and Vision online businesses
2030
Increased investment in e-
commerce infrastructure and
logistics

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 Impact of COVID-19 accelerating online
shopping trends

The 2020s Growth of local and regional online

marketplaces (Noon, Jarir, Extra, Nana)
– E-
Commerc
Expansion of social commerce and
e Boom influencer marketing

Increase in B2B and cross-border e-

commerce

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Why you should
study E-commerce?

• E- commerce revolution, rapid growth

and change.
• Technology continues to evolve.
• Analysts estimates by 2023, over $23
trillion of digital transaction.
• E-commerce expected to impact all
commerce.
• Study e-commerce to understand and
perceive the opportunities and risks.

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 E-Commerce:

• The buying and selling of goods and services online,

including digital transactions.
• Focuses only on online transactions between buyers
and sellers.
• Amazon, eBay, Noon (online stores).

Ecommerce E-Business:

vs Ebusiness • The broader use of digital technology for all aspects of

business operations, including e-commerce, customer
service, supply chain management, and internal
processes.
• Encompasses all digital business activities, including e-
commerce, online marketing, CRM, and supply chain
automation.
• Google, Microsoft, and IBM, which use online
platforms for various business functions beyond selling.

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Technologies Behind E-Commerce -
Internet
Surface Web

• This is the tip of the iceberg, the part you see above the water.
• It's easily accessible to everyone and what you find using search engines like Google, Bing, or
DuckDuckGo.

Deep Web

• This is the part of the iceberg hidden below the water.

• It's much larger than the surface web but not accessible through standard search engines.
• It's not necessarily bad or illegal; it's just not indexed.
• Your online banking pages
• Cloud storage (Google Drive, Dropbox)
• Webmail inboxes (Gmail, Outlook)
• Content behind paywalls (Netflix, online journals)
• Internal company networks (intranets)

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Technologies Behind
E-Commerce -
Internet

• Dark Web
• This is a small, hidden part of the deep web, like
the very bottom of the iceberg.
• It requires special software like the Tor browser
to access and is known for anonymity.
• It can be used for legitimate purposes (like
whistleblowing or bypassing censorship)
• It's often associated with illegal activities such as:

• Selling illegal goods (drugs, weapons)

• Hacking forums
• Stolen data marketplaces

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Technology Behind
Ecommerce
• Web Technologies
• HTML, CSS, JavaScript, Progressive Web
Apps (PWAs), Responsive Design
• E-Commerce Platforms & CMS
• Shopify, Magento, WooCommerce,
BigCommerce
• Headless CMS (e.g., Strapi, Contentful):
Separates front-end and back-end for better
flexibility.

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Technology Behind
Ecommerce
• Payment Gateways & Digital Transactions
• Payment Gateways: PayPal, Stripe, Square,
Authorize.Net.
• Digital Wallets: Apple Pay, Google Pay, Samsung Pay.
• Cryptocurrency & Blockchain: Bitcoin, Ethereum,
decentralized payment systems.
• Database & Backend Technologies
• Databases: MySQL, PostgreSQL, MongoDB
• Backend Frameworks: Node.js, Django, Ruby on
Rails, Laravel
• APIs & Microservices: Enable integration between
different systems

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Technology Behind Ecommerce
• Artificial Intelligence & Machine Learning
• Personalization: AI-powered recommendations (e.g., Amazon’s
recommendation engine).
• Chatbots & Virtual Assistants: Automated customer service (e.g., ChatGPT,
Drift, Tidio).
• Dynamic Pricing: AI adjusts prices based on demand and competition.
• Security & Fraud Prevention
• SSL Certificates: Encrypt data for secure transactions.
• Two-Factor Authentication (2FA): Adds an extra layer of security for login and
payments.
• Fraud Detection Tools: AI-driven fraud prevention (e.g., Riskified, Forter)
• Logistics & Supply Chain Technologies
• Inventory Management Systems: Automated stock tracking and fulfillment.
• RFID & IoT: Real-time shipment tracking.
• Drones & Automation: Amazon’s drone delivery and automated warehouses.

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Technology Behind Ecommerce
• Cloud Computing & Hosting
• Cloud Providers: AWS, Google Cloud, Microsoft Azure
(scalability & performance).
• CDN (Content Delivery Network): Improves website
speed and performance (Cloudflare, Akamai).
• Marketing & Analytics Tools
• SEO & Digital Marketing: Google Ads, Facebook Ads,
email marketing (Mailchimp, HubSpot).
• Analytics & Tracking: Google Analytics, Hotjar, Mixpanel
(analyzes customer behavior).
• Social Commerce: Integration with Instagram, TikTok,
and Pinterest shopping.

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 There are eight unique features of e-commerce
Unique technology that challenge traditional business and
Features explain the growing interest in e-commerce:
1. Ubiquity
(Drivers) of E- 2. Global reach
commerce 3. Universal Standards
Technology 4. Richness
5. Interactivity
6. Information Density
7. Personalization and Customization
8. Social Technology (Social Commerce)

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Available everywhere, at all the times.

Ubiquity
Traditional commerce restricted to space
and time.

E-commerce enables customers to shop

from their home, work, desktop, and
mobile anytime during the day.

Ubiquity reduces the transaction costs

for customers, there is no need to spend
time and money visiting a market.
Global Reach

1. E-commerce enables commercial

transactions to cross cultural,
regional, and national boundaries
conveniently and cost-effectively.
2. E-commerce potential market size is
roughly the world’s online
population.
3. The total number of users an e-
commerce business can obtain is
measure of its reach.
Reach: Number of users

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The technical standards for

conducting e-commerce are
universal.

Universal
Standards
it lowerw the market entry cost
that merchants must pay to
bring their goods to the market.

At the same time these

standards, will reduce the
search cost for the customers.
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Richness “the complexity and content of a

message” (Laudon & Traver, 2022)

Richness Allow customers to engage in ways similar to

face-to-face experience

Online comments, community, forums, and

social networks with social sharing functionality
e.g., Like and Share buttons, all enable customers
to actively interact with business and other users
Interactivity

1. Interactivity is a technology that allow for two ways

communication between the customer and business
(Laudon & Traver, 2022).
2. Traditional commerce has great richness i.e., personal
experience, face-to-face, and visuals cues.
3. e-commerce technologies has the ability to offer
more information richness than traditional commerce
because they are interactive e.g., online chat, finding
more details about the products and services.

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 Information Density

“the total amount and quality of information available to all market

participants”

E-commerce technologies reduce the information collection,

storage, processing, and communication cost.

Price and cost becomes more transparent for customers and

business.

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 1. Personalization: “the targeting of marketing
Personalization messages to specific individuals by adjusting the
message to a person’s name, interests, and past
and purchase”

Customization 2. Customization: “changing the delivered product

or service based on a user’s preferences or prior
behavior ” (Laudon & Traver, 2022).

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Social
Technology 1. E-commerce technologies enable users to create
and share content with online community.

(Social 2. Also, they provide many-to-many mass

communication.

Commerce) 3. This is also known as social commerce.

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 • E-commerce can be categorized into several types based
on the nature of the transactions and the participants
involved
• B2C (Business to Consumer):

Type of E- • Most common type of eCommerce, where

businesses sell goods or services directly to
consumers.
commerce • Examples: Amazon.sa, STC, Noon, Carrefour , Jareer
Books, Al-Dawa Pharmachy
• B2B (Business to Business)
• transactions occur between businesses. One
business sells products or services to another
business, often in bulk.
• SABIC (Saudi Basic Industries Corporation), Saudi
Aramco, Zain Saudi Arabia
• C2C (Consumer to Consumer) (Social Ecommerce)
• Consumers sell products or services directly to
other consumers through an online platform.
• Haraj, opensouq, expatriates, Shein
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C2C, B2B, B2C

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 • Consumer to Government (C2G)
• Consumers provide goods or services to
Type of E- governments or pay for services like taxes,
fines, or fees.
commerce • Subscription-Based E-commerce
• This model offers products or services on a
recurring basis, typically with regular delivery
or access for a subscription fee.
• Marketplace E-commerce
• This is a platform where multiple third-party
sellers can list and sell products to consumers.
The marketplace operator typically takes a
commission for each sale.

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 • White-label E-commerce
• A business sells products that are
manufactured by other companies under their
own brand. The products are rebranded, and
Type of E- the original manufacturer remains hidden.
• Direct to Consumer (D2C)
commerce • Brands sell their products directly to
consumers without intermediaries, such as
retailers or wholesalers.
• M-commerce (Mobile commerce)
• buying and selling of goods and services
through mobile devices like smartphones and
tablets
• Local E-commerce:
• Focus on a geographic area

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 • EC is expected to have a nonstop growth and it
expands into new areas of out life, so what drives
EC to grow ?

Drivers and 1. Benefits to consumers, Businesses, and

society
2. Innovative Business Models e.g. Uber, Selah,
benefits of HS, Youtube
3. Competition
E- 4. Emergence of Social commerce
5. Help by Governments
commerce 6. Technological Developments
7. Capabilities and solutions offered by EC
8. Global Reach

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Drivers and benefits • EC benefits can be divided into three
of E-commerce categories:
1. Benefits to organizations
2. Benefits to consumers
3. Benefits to society

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 Drivers and benefits of E-commerce

Benefits to Organizations Benefits to Consumers Benefits to Society

Cost Savings Convenience Economic Growth
Global Reach Wider Product Selection Environmental Benefits
Improved Efficiency Better Prices and Discounts Inclusive Opportunities
Better Customer Insights Personalized Experience Social Impact
Increased Sales Opportunities Access to Reviews and Ratings Support for Innovation

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Major EC concepts

• The three major activities of EC (Turban et al., 2018):

1. Ordering and payments
2. Order fulfillment
3. Delivery to customers
• Based on these three activities an EC can be either pure or partial e-
commerce business.

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Major EC concepts
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Academic Disciplines and
ECommerce
• E-commerce is a multidisciplinary field that touches various academic disciplines
• Business and Management:
• Marketing:
• Focuses on digital marketing strategies, customer acquisition, brand management, social
media engagement, and search engine optimization (SEO).
• Supply Chain Management:
• Involves logistics, inventory management, and optimization of product distribution
• Operations Management:
• efficiency of business processes, from order fulfillment to customer service and returns
management.
• E-Business Strategy:
• Involves business models, digital transformation, strategic planning, and competition in the
digital space.

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Academic Disciplines and
ECommerce
• Information Technology (IT) and Computer Science:
• Web Development:
• Involves the design, development, and maintenance of e-commerce websites and
platforms, including front-end and back-end technologies.
• Database Management:
• Focuses on managing data related to customers, transactions, products, and inventory
in e-commerce platforms.
• Cybersecurity:
• Ensures that e-commerce platforms are secure from cyber threats, protecting user data
and financial transactions.
• Artificial Intelligence and Machine Learning:
• Enhances personalized recommendations, customer service (e.g., chatbots), fraud
detection, and inventory forecasting in e-commerce.

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Academic Disciplines and
ECommerce
• Economics:
• Market Analysis:
• Focuses on the dynamics of online markets, demand and supply curves, and
price elasticity in e-commerce environments.
• Consumer Behavior:
• Examines how consumers make purchasing decisions in online environments,
influenced by pricing, reviews, convenience, and perceived value.
• Digital Economy:
• Studies the economic impacts of digital technologies on global commerce,
productivity, and market structures.

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Academic Disciplines and
ECommerce
• Law and Ethics:
• Cyberlaw:
• Deals with legal issues related to online transactions, intellectual property, data
privacy, online contracts, and digital consumer protection.
• E-Commerce Regulations:
• Focuses on international laws and regulations regarding online business
operations, taxation, and cross-border transactions.
• Ethical Issues:
• Examines privacy concerns, ethical business practices, data handling, and
sustainability in online business models.

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Academic Disciplines and
ECommerce
• Human-Computer Interaction (HCI):
• User Experience (UX) Design:
• Concerned with designing intuitive, accessible, and engaging online shopping
experiences to maximize customer satisfaction.
• Usability Testing:
• Focuses on evaluating e-commerce websites and applications to ensure ease of
use, efficiency, and overall user satisfaction.

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Academic Disciplines and
ECommerce
• Psychology:
• Consumer Psychology:
• Studies the mental and emotional processes behind online purchasing behavior,
decision-making, and how online environments influence consumer emotions.
• Trust and Security Perception:
• Investigates how consumers perceive the trustworthiness and security of e-
commerce platforms and how these perceptions influence purchasing decisions.

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Careers in Ecommerce
• E-commerce Management
• Digital Marketing
• Web Development and Design
• Data Analytics
• Customer Service and Support
• Product and Merchandising
• Supply Chain and Logistics
• Cybersecurity and Legal
• Entrepreneurship
• Content Creation and Copywriting
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 • Lack of Physical Interaction

Ecommer • Security and Privacy Concerns

• Logistics and Delivery Issues

ce • Technology and Access Barriers

• Limited Customer Trust
limitation • Competition and Saturation
• Customer Loyalty and Engagement Challenges
s • Legal and Regulatory Issues
• Market Segmentation and Audience Targeting

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 1. Content and in depth information
2. Customization

Drivers to 3. Community
4. Convenience
consumer 5. Wider choice of products, services and suppliers

s 6. Cost reduction

adoption

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 • AI and Automation Integration
• Voice Commerce (V-Commerce)
• Augmented Reality (AR) and Virtual Reality (VR)
• Social Commerce and Influencer Marketing

Ecommer
• Sustainability and Ethical Consumerism
• Mobile Commerce (M-Commerce) and Mobile-First

ce Future
Experience
• Omnichannel and Hybrid Shopping Experiences
• Global E-Commerce and Cross-Border Shopping
• Subscription-Based and As-a-Service Models
• Blockchain and Cryptocurrency Integration
• Faster Payment Solutions and Fintech Integration

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