E-COMMERCE Unit 1: An Overview of E-Commerce E EOOMMERGE e Shree Harsh Attri @ (Assistant Professor) Department: Bachelor of Computer Applications JIMS Engineering Management Technical Campus, Greater NoidaWHAT IS COMMERCE? o The field of study that deals with business and its operations. o It is a buying and selling of goods * means when one buys a product or service from others or sell a product or service to others. « Also called as trading of goods or services. ah ef aff (sere arart )BUYER AND SELLER ROLES IN COMMERCE Inspection, testing, and acceptance Moke payment Warranty claims and regular maintenance at eS ate (agree arart ) Arrange for delivery Invoice and bill customer Receive and process customer payments Provide after-sale support, Maintenance, and worronty servicesWHAT IS E-COMMERCE ? © e-commerce or electronic commerce is the process of buying or selling goods, products or services over the electronic medium. o Here, internet is used as the primary electronic medium or network to do this type of transactions. o It is also referred as a paperless exchange of a business information using EDI, Email, Electronic fund transfer etc. For example: Amazon, eBay, Flipkart etc. are the world’s leading e-commerce websites. o E-payment systems are widely used in electronic commerce for buying or selling of goods through various E-payment methods like credit/debit card, internet banking, e-wallet. © To implement e-commerce, it requires new physical and legal infrastructure (such as computer systems, telecommunication network, and cyber laws), new skills, new workflows and a) processes, ah ef aff (sere arart )THE PROCESS OF E-COMMERCE > Attract customers « Advertising, marketing > Internet with customers « Catalog, negotiation > Handle and manage orders « Order capture « Payment « Transaction « Fulfillment (physical good, service good, digital good) > React to customer inquiries « Customers service ° Order tracking . © ah ef aff (sere arart ) jiumisSCOPE OF E-COMMERCE E-commerce consists of three areas ie. Electronic Market, Internet Commerce and Electronic Data Interchange o Electronic Markets: ‘An electronic market is the use of information and communication technology to present a range of offerings PL available in a market segment so that the purchaser can compare the prices of the offerings and make a purchase + decision e.g Airline Booking System o Electronic Data Interchange:- ‘The three categories of e-Commerce. + It provides a standardized system for coding trade transactions so that they can be communicated from one computer to another without the need for printed orders and invoices & delays & errors in paper handling. * It is used by organizations that make a largo no. of regular transaetions, e.g. EDI is used in the largo supermarket chains for trancactione with their suppliers. © Internet Commerce: + Information and communications technologies can be used to advertise & make sales of wide range of goods & services. + This application is both for business to business & business to consumer tact + e.g. The purchase of goods that are then delivered by post or the booking of tickets tI can be picked up by the clients. at ef 3f& (sere sat )WHAT IS E-BUSINESS ? o Transformation of an organization's business and functional processes by integrating internet technologies, philosophies and computing paradigms. o It includes wider kind of business processes, such as electronic ordering processing, supply chain management, customer relationship management etc. o E-businessincludes: Merchandise planning and analysis Order entry Warehousing Inventory management Customer services Knowledge management Shipping and other logistics Functional accounting and reporting Customer Relationship Management (CRM) o E-business helps an organization in enhancing the etticien GD, speed, innovations, R&D etc. at at ait (ere sat ) LLL LRNLLRASE- BUSINESS AND E-COMMERCE e-business Serie commerce Mobile: e-commerce v e-commerce is a major component of e-business. v e-commerce includes transactions which are related to money, but e-business includes monetary as well as allied activities. a v It can also be said that e-commerce is e-business websites, but e-business is not necessarily e-commerce.E- BUSINESS AND E-COMMERCE Comparison Chart Basis for Comparison E-commerce E-business Trading of merchandise, Running business using Meaning over the internet is known | the internet is known as as E-commerce. E-business. What is it? Subset Superset Is it limited to monetary Yes No transactions? What they carry out? Commercial transactions Business transactions Extroverted Ambiverted Approach (covers customers, suppliers, | (covers intemal as well as distributors etc) external processes) Requires Website Website, CRM, ERP, » Which network is used? | Internet Internet; Intranet Extranet.DIFFERENCE BETWEEN TRADITIONAL COMMERCE AND E-COMMERCE focuses on the exchange of trading activities are online mostly during the days. Exchange products and services through | via the internet and can be personal interactions. considered automatic. a limited to business hours e-commerce is 24/7, it ean be Timing done anytime day and night. Physical Inspection and Interaction allows a buyer to be physical inspect goods and test out services before making a purchase. Customer Interaction is face to face Goods cannot be inspected physically before purchase. Customer Interaction is screen to face. Scope of Business Limited to particular area Worldwide reach Information Exchange No uniform platform for exchange of information. Provides a uniform platform for information exchange. Resource Focus Supply side Demand side Marketing One way marketing One-to-one marketing Payment Cash, cheque, credit card, ete. Credit card, fund transfer ete. Delivery of Goods Instantly Takes timeProduct Information DIFFERENCE BETWEEN TRADITIONAL COMMERCE AND E-COMMERCE Magazine, flyers, newspapers ete. Web sites, online catalogues ete. Business communications Regular phone calls, sending and receiving letters . Check Product Availability Phone calls, faxes, letters ete. E-mail, websites, extranet Order Generations Printed Forms E-mail, websites Product Acknowledgement Phone Calls, faxes etc. E-mail, websites, blogs ete. Invoice Generation Writing on Printed forms Websites ah ef aff (sere arart )pe N@ ore oo . Buying and Selling of products electronically AIMS OF E-COMMERCE . Shipping of products 1. S Producing Financial Statements . Reduced Costs . Lower product cycle time . Faster Customer Response . Improved Service Quality FUNCTIONS OF E-COMMERCE Communication Function: Aimed at the delivery of information or documents to facilitate business transactions. E.g e-mail Process Management Function: Covers the automation and improvement of business processes. E.g. networking of computers to transfer the data. . Service Management Function: To improve the quality of service like tracking shipments , scheduling of delivery of products ete. internet through retail websites like = www.amazon.c www flipkart.com, www.ebay.com etc. . Transaction Capabilities: Provides the ability to buy/sell on [ ) at et sit (ser ams )E-COMMERCE INFRASTRUCTURE Information superhighway infrastructure e Internet, LAN, WAN, routers, ete « Telecom, cable TV, wireless, ete Messaging and information distribution infrastructure e HTML, XML, email, HTP, ete Common business infrastructure e Security, authentication, electronic payment, directories catalogs, etc Web architecture « Client/server model e N-tier architecture; e.g. web servers, application servers, database servers, scalabilty » © ah ef aff (sere arart ) jiumisAPPLICATIONS OF E-COMMERCE + Inter-organizational (business-to-business) - Supplier management - Inventory management - Distribution management - Channel management . Intra-organizational (within business) - Workgroup management - Collaborative publishing r = - Sales force productivity + Customer-to-business - Social portals - Transactional portalsAPPLICATIONS OF E-COMMERCE Online Marketing and Purchasing: Data collection about customer behavior, preferences, needs and buying patterns is possible through Web and E-commerce. This helps marketing activities such as price fixation, negotiation, product feature enhancement and relationship with the customer. Retail and wholesale: selling of goods from Business-to-Consumer through electronic stores. It attracts the customer and the seller into one virtual space through a Web browser. . Finance: Customers can check the balances of their savings and loan accounts, transfer money to their other account and pay their bill through on- line banking or E-banking, on-line stock trading. . Manufacturing: used in the supply chain operations of a company that speeds up the flow of raw material and finished goods among the members of the business community. . Online Auction: Customer-to-Customer E-commerce is direct selling of goods and services among customers that involve bidding . Online publishing: digital publication of e-books, digital magazines, and the development of digital libraries and catalogs . Online booking (ticket, seat ete): Internet booking engine (IBE) i application which helps the travel and tourism industry support reserval through the Internet. It helps consumers to book flights, hotels, holiday packages, insurance and other services online,TOOLS & TECHNOLOGIES FOR E-COMMERCE 1. Electronic Data Interchange (EDI): computer-to-computer exchange of business documents in a standard electronic format between business partners. Pine Os oo Buyer's Supplier's internal system internal system 2. Bar Codes: A barcode is a square or rectangular image consisting of a series of parallel black lines and white spaces of varying widths that can be read by a scanner. They are used in retail stores as part of the purchase process, in warehouses to track inventory, and on invoices to assist in accounting, among many other uses. There are two general types of barcodes: 1-dimensional (1D) and 2-dimensional (2D) a) 1D barcodes are a series of lines used to store text information, such as product type, size, and color. [IHNEN MUI 1 b) 2D barcodes are more complex and ean include more informal than just text, such as the price, quantity, and even an image. [J OF ah ef aff (sere arart )TOOLS & TECHNOLOGIES FOR E-COMMERCE 3, E-mails: consists of messages composed by an individual and sent in digital form to other recipients through Internet. 4. Internet: The Internet is a collection of interconnected computer networks, linked by copper wires, fiber-optic cables, wireless connections, etc. It transmits data by packet switching using the standard Internet Protocol (IP). World Wide Web (WWW): World Wibe Web is a collection of interconnected documents and other resources which are linked together by hyperlinks and URLs. The World Wide Web is one of the services accessible via the Internet, along with various others including e-mail, file sharing, online gaming ete. 6. Electronie Forms: Electronic forms are online web pages or electronic on documents designed to capture, validate, and submit data in forms processing. These forms provide a series of fields where data is collected, often using a Web browser. They take the place of paper forms and are designed to capture, validate, and submit data to a recipient for forms processing in a more efficient manner. e-forms are used in Accounting, Human Resources, ie Quality Assurance, Customer Services etc. m2 ah ef aff (sere arart )ef TYPES OF E-COMMERCE JMIMS There are 6 types of e-commerce systems 1. B2B: Business — to - Business 2. B2C: Business — to - Consumer 3. C2C: Consumer - to - Consumer 4, C2B: Consumer - to - Business 5. B2A: Business - to - Administration 6. C2A: Consumer - to - Administration All these 6 types of e-commerce that are used today are classified based on the nature of the transactions. ah ef aff (sere arart )B2B: BUSINESS — TO — BUSINESS ¥ companies do business with each other a manufacturer selling a product to a wholesaler, a wholesaler selling a product to the retailer. Here manufacturer, wholesaler and retailer all are doing their separate businesses. > > manufacturer has a website Wholesaler > wholesaler places an order on the website » After receiving the products, wholesaler sell it to the retailers. ah ef aff (sere arart )B2C: BUSINESS — TO - CONSUMER > company sells their products, goods or services directly to the consumer online. v customer view products on the website and order it. v After receiving the order details, the company processes the order and send the products directly to the customer. For example, Amazon, Flipkart etc ah ef aff (sere arart )C2C: CONSUMER — TO — CONSUMER v consumer sells products, goods or services to other consumers using the internet or the web technologies. The C2C business model helps to sell assets or properties like a car, house, bike, electronics etc via online to other consumers. OLX, Quickr etc are this type of business model. Consumer-2 Consumer-1 : ah ef aff (sere arart ) PecanC2B: CONSUMER - TO — BUSINESS v Itis the reverse model of the B2C. v consumer or end user provides a product or service to an organization. > individual customers offer to sell } Business | products or services to the companies who are prepared to purchase them. (Website) For Example: 1. Freelancers like Software Developer, blog writers, technical Consumer writers etc. 2. Hand Crafted products made in villages, widow shelters etc sell to organizations. . © ah ef aff (sere arart ) jiumisB2A: BUSINESS — TO — ADMINISTRATION v also referred as the business to government (B2G) commerce and it is a derivative of B2B e-commerce model. v the businesses and government agencies (administration) use central websites to exchange information and do business with each other more efficiently. Administration > The B2G_ business network provides a platform to businesses to bid on government. opportunities such as auctions, tenders and application submission etc. ah ef aff (sere arart )C2A: CONSUMER - TO — ADMINISTRATION v Also known as Consumer To Government e-commerce model. v It help consumers to request information or post various feedbacks regarding public sectors directly to the government authorities or administration. > This model provides an easy and instant solution or way to establish communication between the consumers and government. Administration For example 1. Paying electricity bill, water bill Consumer etc. 2. Making Payment of Taxes, Insurances ete. ah ef aff (sere arart )BENEFITS OF E-COMMERCE Helps in increasing profits and decreasing costs; reduced overheads ete . Wide base for customers — internationally; geographically scattered; areas not previously reached. Identify new suppliers and business partners Ability to create highly specialized businesses Lower communication costs Buyers have wide range of choices of vendors and products Availability 24/7 Competitive market causes decrease in prices, discounts or “freebies” thrown in Customers receive relevant and detailed information in seconds, as opposed to days or weeks Allows individuals to work from home, do less travel e ah ef aff (sere arart )OBSTACLE, PROBLEMS AND ISSUE FACED BY COMPANIES IN ENGAGING E-COMMERCE Lack of awareness and understanding of the value of e- commerce Many thinks that e-commerce suited only for big companies Additional cost that will not bring any major returns to investment Lack of ICT (Information & Communication Technologies) knowledge and skills Shortage of skilled workers especially in small and medium companies Limited capabilities in design, distribution, marketing and post sale support Financial cost Initial investment to adopt new technology is proportionately heavier for small than for large firm Firms will need to undertake investment in an appropriate computer system to implement e-commerce. High cost of computer and internet access Infrastructure Many developing countries has poor telecommunication infrastructure Security Ensuring security on payment and privacy of online transaction Lack of trust to use internet to make online paymentIMPACT OF E-COMMERCE E-Commerce eliminates mediation process as producers can sell direct to consumers. Firms will have fast knowledge of what customers want. Firms can use this knowledge to guide the development of their product lines and to identify new growth areas at their earlier stages. E-Commerce will also help small and medium-sized enterprises (SMIs) to gain greater market reach for their products and services. E-Commerce offers consumers a wide range of new opportunities to do direct shopping and banking using the convenience of a home computer or other communication devices. E-Commerce process will lead to greater competition among firms to protect their market share. ah ef aff (sere arart )Trade Process & Trade CyclesE-COMMERCE TRADE CYCLE A trade cycle is the series of exchanges between a customer and supplier, that take place when a commercial exchange is executed, Conducting a commercial transaction involves the following steps: 1. Pre-Sale: Search - findinga supplier Negotiate — agreeing the terms of trade 2. Execution: Order Delivery 3. Settlement: Invoice Payment 4. After-sales: warrantee and service ah ef aff (sere arart )E-COMMERCE TRADE CYCLE The trade cycle varies dependingon: v The nature of the parties to the transaction. v The frequency of trade exchanges. v The nature of the goods or services being exchanged. Three Generic trade cycles are: > Repeat Trade Cycle: regular, repeat transaction between commercial trading partners. >» Credit Trade Cycle: Irregular transactions between commercial trading partners where execution and settlement are separated. » Cash Trade Cycle: Irregular transactions in once-off trading relationships where execution and settlement are typically combined. ah ef aff (sere arart )GENERIC TRADE CYCLES Trade Cycle: Repeat Credit jums eater Noida Search } i) Negotiate Pre-Sale Order Deliver Execution Invoice Payment Settlement After Sales OFC DHOHO) # After cak@® at et aft (ere arart )TRADE CYCLES IN E-COMMERCE TECHNOLOGIES E-Commerce Technologies are: 1. Electronic Market: Inter-Organizational information system that provides facilities for buyers and sellers. It is primarily about the search phase of trade cycle. 2. EDI: Used for regular repeat transactions, basically in super market, vehicle assembler etc. 3. Internet Commerce: Consumer purchasing over the internet. After sales service is one of the important factor for e.g online support and online services such as banking. . © ah ef aff (sere arart ) JjimsELECTRONIC MARKETS jums Greater Noida o Emphasis on the search phase of the trade cycle o Typically an inter-organisational credit trade cycle Pre-Sale Negotiate Execution Deliver Invoice Settlement Payment After Sales After Sale sector — the operation of the electronic market is not © Limited applications — airline seat bookings and financial @ necessarily in the vendor's interests.ELECTRONIC DATA INTERCHANGE o Used for standardised, repeat, inter-organisational transactions Search Pre-Sale Negotiate Execution Deliver Invoice Settlement Payment After Sales After Sale Notable users of EDI are vehicle assemblers, component supplier’s, and supermarkets (and other multiple retailers)! ordering the goods to restock their shelves.om 1 ef INTERNET COMMERCE jyums < o Used for once-off transactions — consumer or inter- organisational transactions. Search Pre-Sale Negotiate Order - Execution Deliver Invoice Settlement Payment After Sales After Sale © Can apply to Search, Execution / Settlement and / or After Sales. o Consumers pay at time of ordering — businesses may have credit arrangements with the suppliers.E-COMMERCE IN PERSPECTIVE © e-Commerce is not appropriate to all business transactions and, within e-Commerce, there is no one technology that can or should be appropriate to all requirements. Electronic Markets EDI Internet ComerceREFERENCE Book © e-commerce: Strategy, Technologies and Applications, David Whiteley, Tata McGraw Hill o E-Commerce: The Cutting Edge of Business, KK Bajaj & Debjani Nag, McGraw Hill Website © http:/motes4learners.blogspot.com/p/ecommerce-unit-Lhtml © https://www.csetutor.com/what-is-e-commerce-types-of-e-« erce/ o https:/Awww. ‘ialspoint.com/e commerce/e commerce adv. es. hti © https://medium.com/@Magento expert/e-business-vs-e-commerce-know-the- differences-15lec9baf0fe o https://www.ques10.com/p/19910/write-short-note-e-commerce-trade-cycle/ ah ef aff (sere arart )