(Foundation Elective Paper)

Basics of E-Commerce
Unit-I
E-Commerce: Meaning, Concept, Definitions, Origin and Development, Categories
of ECommerce:
B2B, B2C, B2G, G2G,G2C; The Constitution of the E-Commerce: Portal of the
Network, Customer Relationship Management, Supply Chain Management, Logistic
Management,
Decision Support; Supporting Environment for E-Commerce: Technical
Environment, Legal
Environment, Credit Environment and Financial Environment.
Unit-II
M-Commerce: The Origin of M-Commerce, M-Commerce Components, The
Development of MCommerce,
The Application of M-Commerce
Unit-III
Payment Technologies for E-Commerce: Online Bank, E-Payment Tools: E-Payment
System,
Intelligent Card, E-check, E-wallet, E-Cash
Unit-IV
Electronic Commerce: Influence on Marketing: Product, Physical Distribution, Price,
Promotion,
Marketing Communication, Common e-Marketing Tools

UNIT I
Basics of E-commerce:
Business:-A business is an organization engaged in the trade of goods, services, or both to
consumers.
Commerce: - The buying and selling of products and services between firms, usually in different
status or countries.
E-commerce: - E-commerce means buying and selling of products or services over electronic
systems such as the internet and other computer networks. Electronic commerce draws on
technologies such as mobile commerce, electronic funds transfer, supply chain management,
Internet marketing, online transaction processing, Electronic Data Interchange (EDI), inventory
management systems, and automated data collection systems.
E-commerce businesses employ the following:
Online shopping web sites for retail sales direct to consumers
Providing or participating in online marketplaces, which process third-party business-to-consumer
or consumer-to-consumer sales
Business-to-business buying and selling
Gathering and using demographic data through web contacts and social media
Business-to-Business (B2B) electronic data interchange
Marketing to prospective and established customers by e-mail or fax (for example, with newsletters)
Online financial exchanges for currency exchanges or trading purposes
Basic Elements of e-commerce:
E-commerce framework

Conceptual framework
Here are seven important infrastructure decisions that E -commerce businesses face.
1. Marketing
2. Facilities
3. Customer Service
4. Information Technology
5. Fulfillment
6. Finance and Administration
7. Human Resource
Difference between E-business and E-commerce:-
In both the cases, E stands for “Electronic networks “ and describes the applications of Electronic
network technology – including internet and electronic data interchange (EDI) – to improve and
change business process . E-commerce covers outward - facing processes that touch customers,
suppliers and external partners, including sales, marketing, order taking, delivery, customer service,
purchasing of raw materials. E-business includes E-commerce but also covers internal process such
as production, inventory management, products development, finance, human resources, E-business
strategy is more complex, productivity and cost savings.
Ex:-E-bay, Amazon.
Activities of E-commerce
a) Increasing the speed of service delivery.
b) Use of computer networks to search and retrieve information f o r human
c) Buying and selling of information, products and services via computer network.
d) Faster customer response and improve services quality .
e) Advertising on the internet.
f) Online electronic commerce payments just like electronic funds transfer.
Benefits of E-commerce
a. The global nature of the technology.
b. Low cost.
c. Opportunity to reach hundreds of millions of people.
d. Interactive nature.
e. Variety of possibilities.
f. Rapid growth of the supporting infrastructures.
E-commerce benefits are classified into 3 types.
1. Benefits to organization.
2 . Benefits to consumers.
3 . Benefits to society.
Technical Infrastructure
Internet connectivity
The Internet's growth has become explosive and it seems impossible to escape the bombardment of
www.com's seen constantly on television, heard on radio, and seen in magazines. Because the
Internet has become such a large part of our lives, a good understanding is needed to use this new
tool most effectively. Internet is network of network means
a global network of computers. Each computer connected to the Internet must have a unique
address. Internet addresses are in the form of nnn.nnn.nnn.nnn (where nnn must be a number from 0
– 255). This address is known as an IP address. (IP stands for Internet Protocol; more on this later.)
The picture below illustrates two computers connected to the Internet; your computer with IP
address 1.2.3.4 and
another computer with IP address 5.6.7.8. The Internet is represented as an abstract object in-
between.
When you type a URL into a web browser, this is what happens:
1. If the URL contains a domain name, the browser first connects to a domain name server and
retrieves the corresponding IP address for the web server.
2. The web browser connects to the web server and sends an HTTP request (via the protocol stack)
for the desired web page.
3. The web server receives the request and checks for the desired page. If the page exists, the web
server sends it. If the server cannot find the requested page, it will send an HTTP 404 error
message. (404 means 'Page Not
Found' as anyone who has surfed the web probably knows.)
4. The web browser receives the page back and the connection is closed.
5. The browser then parses through the page and looks for other page elements it needs to complete
the web page. These usually include images, applets, etc.
6. For each element needed, the browser makes additional connections and HTTP requests to the
server for each element.
7. When the browser has finished loading all images, applets, etc. the page will be completely
loaded in the browser window.

E-commerce software
E-commerce software is the engine behind the scenes of an online store, making it possible to easily
manage inventory, add or remove products, calculate taxes, and everything else required to manage
a website and fulfill orders.
E-commerce software simplifies intricate processes in a friendly user interface that enables people
of nontechnical backgrounds to oversee an entire e commerce operation. Despite the ease of use that
e-commerce
E-COMMERCE SECURITY
E-commerce security is the protection of e-commerce assets from unauthorized access, use,
alteration, or
destruction.
Six dimensions of e-commerce security
1. Integrity: prevention against unauthorized data modification
2. No repudiation: prevention against any one party from reneging on an agreement after the fact
3. Authenticity: authentication of data source
4. Confidentiality: protection against unauthorized data disclosure
5. Privacy: provision of data control and disclosure
6. Availability: prevention against data delays or removal
THREATS
1. Intellectual property threats -- use existing materials found on the Internet without the owner's
permission, e.g., music downloading, domain name (cyber squatting), software pirating
2. Client computer threats
– Trojan horse
– Active contents
– Viruses
3. Communication channel threats
– Sniffer program
– Backdoor
– Spoofing
– Denial-of-service
4. Server threats
– Privilege setting
– Server Side Include (SSI), Common Gateway Interface (CGI)
– File transfer
– Spamming
A procedure that recognizes, reduces, or eliminates a threat
1. Intellectual property protection
– Legislature
– Authentication
2. Client computer protection
– Privacy -- Cookie blockers;
– Digital certificate (Figure 5.9)
– Browser protection
– Antivirus software
– Computer forensics expert
3. Communication channel protection
– Encryption
Public-key encryption (asymmetric) vs Private-key encryption (symmetric) (Figure 5-6)
Encryption standard: Data Encryption Standard (DES), Advanced Encryption Standard (AES)
– Digital signature
Bind the message originator with the exact contents of the message
–A hash function is used to transform messages into a 128-bit digest (message digest).
–The sender’s private key is used to encrypt the message digest (digital signature)
–The message + signature are sent to the receiver
–The recipient uses the hash function to recalculate the message digest
–The sender’s public key is used to decrypt the message digest
–Check to see if the recalculated message digest = decrypted message digest
4. Server protection
Access control and authentication
Digital signature from user
Username and password
Access control list
The benefits of Ecommerce:
Benefits to organizations
1. E-commerce expands the market place to national and international level.
2. E-commerce decreases the cost of creating, processing, distributing, storing, and retrieving paper
based
information.
3. Ability for creation highly specialized business.
4. E-commerce reduces the time between the outlay of capital and the receipt of products and
services.
5. E-commerce initiates business processes reengineering projects.
Benefits to consumers:
The following are the benefits of E-commerce to consumer
1. E-commerce enables customer to shop transactions 24hrs a day, all year round from any location.
2. E-commerce provides customers with more choices they can select from many vendors and from
many products.
3. Products E-commerce allows quick delivery.
4. Customer can retrieve relevant and detailed information in seconds, rather than days or weeks .
5. E-Commerce facilitates competition, which results in substantial discounts
Benefits to society:
The following are the benefits of E-Commerce to society:
1.E-Commerce enables more individuals to work at home and to do less travelling for shopping
resulting in less traffic on the roads and lower air pollution.
2. E-Commerce enables people in rural areas to enjoy products and services that are not available to
them. This includes opportunities to learn professions and earn college degrees.
3. E-Commerce facilitates delivery of public services such as health care education and distribution
of Government social services at a reduced cost and or improved quality.
Limitations of E-Commerce
The limitations of E-Commerce can be categorized into
1) Technical
2) Non-Technical
Technical limitations of E-Commerce are:
1. There is a lack of system security, reliability, standards and some communication protocols.
2. There is insufficient telecommunication band width.
3. Soft ware development tools are changing rapidly.
4. It is difficult to integrate the internet and soft ware with some existing application data basis.
Non-Technical limitations are:
1. COST AND JUSTIFICATION: - The cost of developing E-Commerce in house is very costly
and made mistakes due to lack of experience may result in delays.
2. SECURITY AND PRIVACY: - these issues are especially important in the B2C area, especially
security issues which are privacy measures are constantly improved.EC Industry has a very long
and difficult task of convincing customers that online transactions are secure and they will keep.
3. LACK OF TRUST AND USER RESISTANCE: - Customers do not trust on unknown faceless
sellers, paperless transactions and electronic money.
E-COMMERCE APPLICATIONS:
1)E-MARKETING : E-Marketing also known as Internet marketing, Online marketing, Web
marketing. It is the marketing of products or services over the internet. It is consider to be broad in
scope because not refers to marketing on the internet but also done in Email and wireless media. E-
Marketing ties together the creative and technical aspects of the internet, including design
development, advertising and sales. Internet marketing is associated with several business models
ie., B2C, B2B, C2C. Internet marketing is inexpensive when examine the ratio of cost to the reach
of the target.
2)E-ADVERTISING: It is also known as online advertising it is a form of promotion that uses
internet and world wide web to deliver marketing messages to attracts customers. Example: Banner
ads, Social network advertising, online classified advertising etc.The growth of these particular
media attracts the attention of advertisers as a more productive source to bring in consumers. An
online advertisement also offers various forms of animation.
The term online advertisement comprises all sorts of banner advertisement, email advertising, in
game advertising and key soon.
3) E-BANKING OR INTERNET BANKING: Means any user with a personal computer and
browser can get connected to his banks, website to perform any of the banking functions. In internet
banking system the bank has a centralized data base i.e., web-enabled. example for E-Banking is
ATM.
SERVICES THROUGH E-BANKING:
• Bill payment service.
• Fund Transfer
• Investing through internet Banking
• Shopping
4) MOBILE-COMMERCE: Mobile Commerce also known as M-Commerce, is the ability to
conduct, commerce as a mobile device, such as mobile phone.
SERVICES ARE:
1. Mobile ticketing
2. Mobile Vouchers, Coupons and
3. Mobile contract purchase and delivery mainly consumes of the sale of ring tones, wallpapers and
games of mobile phones.
5) E-LEARNING: E-Learning comprises all forms of electronically supported learning and
teaching’s-Learning specially the computer and network skills and knowledge’s-Learning
applications include web-based learning, computer-based learning. Content is delivered via. The
internet, intranet, audio, or video tape, satellite TV, and ED-ROM.Computer-Based Learning, refers
to the use of computers as a key component of the education
environment.
6) ONLINE SHOPPING:- Online shopping is the process whereby consumer directly buy goods or
services from a sell in real time, without an intermediary services over the internet . Online
shoppers commonly use credit card to make payments, however some systems enable users to
create accounts and pay by alternative means ,such as
1. Billing to mobile phones and landline.
2. Cheque.
3. Postal money order.
7) SEARCH ENGINE:- A web search engine is designed to search for information on the WWW
and FTP servers. The search results are generally presented in list of result and are often called hits.
The information may consist of web pages, images, information, and other types of files.
.
8) ONLINE TRADING:- An online trading community provides participants with a structured
method for trading bantering (exchanging goods with goods) or selling goods and services. These
communities often have forums and chat rooms, designed to facilitate communication between the
members.
9) ENTERTAINMENT:-
The conventional media that have been used for entertainment are
1. Books/magazines.
2. Radio.
3. Television/films.
4. Video games.