E-COMMERCE

FALL 2024
Sharif CE Department
Chapter 1 Introduction to E-commerce

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What is E-commerce

• Buying and selling of goods and services over the internet.

• The use of internet , Web , mobile app , browser , etc.
• It includes different types of business transactions :
1. B2C
2. B2B
3. C2C
• Commercial transactions involve the exchange of value between organizations or individuals
in return for products and/or services

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What is E-commerce

• It has transformed how businesses operate

• Provides customers with convenience and accessibility
• Enables businesses to reach global markets
• Lower costs
• Streamline operations
• Popular examples of e-commerce platforms : Amazon, Alibaba, and Shopify

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Discussion

How has the rise of e-commerce

transformed traditional business models,
and what opportunities does it create for
businesses and consumers in the digital
age?

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The importance of E-commerce

• Technology continues to evolve exponentially; it creates opportunities to develop:

1. new business models
2. disrupt or change traditional industries
3. reshape existing firms
• Creating significant career and employment opportunities
• Make our tasks easy ( product search, online payment, etc.)
• Expansion of using digital world

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The importance of E-commerce

Usages of social media in the world

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The importance of E-commerce

• Is essential to understanding the future :

1. opportunities
2. risks
• Prepare leaders to engage in and lead discussions within their organizations
• It will provide insights on:
1. analyzing business ideas
2. selecting effective business models
3. addressing security and ethical concerns
4. and optimizing marketing strategies using traditional and digital tools

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Discussion

"What are the key technological

advancements that have driven the
growth of e-commerce, and how have
they reshaped consumer behavior and
business strategies?

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THE DIFFERENCE BETWEEN E-COMMERCE AND E-BUSINESS

The key difference between E-commerce and E-business lies in their scope and focus:

• E-Commerce:
1. Refers specifically to the buying and selling of goods and services over the internet.
2. It focuses on online transactions involving:
1. customers
2. retail sales and digital products
3. services.

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THE DIFFERENCE BETWEEN E-COMMERCE AND E-BUSINESS

• E-Business
1. Includes all business activities conducted online, not just transactions.
2. Covers internal processes like:
1. supply chain management
2. customer relationship management (CRM)
3. online business collaboration.
3. E-commerce is part of E-business
4. E-business applications turn into e-commerce when an exchange of value occurs

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THE DIFFERENCE BETWEEN E-COMMERCE AND E-BUSINESS

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In summary, e-commerce focuses on online sales, while e-business
includes a wider range of digital business operations.

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TECHNOLOGICAL BUILDING BLOCKS UNDERLYING E-COMMERCE

The technological building blocks underlying e-commerce are the key

components that enable the smooth operation and growth of online
business activities. These building blocks include:
1. Internet
2. Web
3. Mobile platform

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TECHNOLOGICAL BUILDING BLOCKS UNDERLYING E-COMMERCE

1. The Internet
• Worldwide network of computer built on common standards.

INTERNET ACCESS IN THE USA

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TECHNOLOGICAL BUILDING BLOCKS UNDERLYING E-COMMERCE

2. World Wide Web

•Information system running on internet that provides access to web pages .

✓ Web pages that identified by Google

✓ Subscription content, databases

and encrypted content

✓ Sites that are not indexed

The surface Web is only a small part of online content.

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TECHNOLOGICAL BUILDING BLOCKS UNDERLYING E-COMMERCE

Mobile Technology
•The rise of smartphones and tablets has given birth to mobile commerce
• access online stores and services via apps websites.
• Technologies are :
1. 4G
2. 5G

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Discussion

Apps or Web, which one would you

choose for your business?

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 UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

E-commerce technologies provide a number of unique features that have impacted the conduct of business.

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

Before e-commerce we have some disadvantages :

1. mass-marketing
2. limited access to information.
3. constrained by geography
4. lacked transparency in pricing
5. creating profitable information asymmetries for companies.

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

E-commerce has transformed them by :

1. giving merchants greater insight into consumer behavior
2. enabling market segmentation
3. personalized pricing
4. stronger brand positioning.
• E-commerce technologies allow for :
1. more flexibility
2. real-time market adaptation

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ UBIQUITY

• Means that available just about everywhere at all times

• allowing shopping from anywhere at any time
• free from physical and geographic limitations like location
• For consumers, reduces transaction costs
• no need for travel and lowers the mental effort required to make purchases

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ GLOBAL REACH

• Reach means the total number of consumer that E-business can obtain it
• allows transactions to cross cultural, regional, and national boundaries more easily
• cost-effectively
• giving merchants access to a global market of over 4 billion online users
• enables startups to reach national audiences more easily

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ UNIVERSAL STANDARDS

• Standards that are shared by all nations around the world

• Have lower market entry costs and reduce search costs for consumers
• Enable a unified global marketplace
• Simplifying price discovery
• Offering the potential for easier global comparisons of products, prices, suppliers

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ RICHNESS

• Information richness refers to the depth and complexity of a message

• It enables merchants to market and sell complex products without the need
for face-to-face

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ INTERACTIVITY

• Technology allows for two-way communication between merchant and consumer

• Creates a more engaging online shopping experience
• Facilitated by features like comment, community forums, social sharing buttons
• Responsive design elements and interactive product displays enhance user engagement

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ INFORMATION DENSITY

• The amount and quality of information available to all market participants

• E-commerce enhance information density
• Greater currency
• Accuracy
• Timeliness of information
• Leading to increased transparency in pricing and costs
• Consumers can easily compare prices

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ PERSONALIZATION AND CUSTOMIZATION

• E-commerce enable personalization and customization based on individual data such as:
1. names
2. interests
3. past purchases
• Online platforms can let users select the types of content they wish to see
• Facilitating targeted marketing and the precise identification of market segments
• They enhance the shopping experience and improve engagement with consumers

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

✓ SOCIAL TECHNOLOGY

• E-commerce technologies have transformed communication by enabling users to:

1. create and share content within a global community
2. fostering social networks in ways previous technologies did not
• e-commerce facilitates a many-to-many communication model
• empowering users to generate and distribute their own content
• allows for more personalized content consumption and greater interaction among users

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UNIQUE FEATURES OF E-COMMERCE TECHNOLOGY

Provides a summary of each of the unique features of e-commerce technology

and their business significance

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Price discrimination
• First degree
• Personalized or perfect
• Second degree
• Product versioning or menu pricing
• Quantity discounts
• Buy one get two
• Loyalty discounts for frequent buyers
• Third degree
• Group pricing

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TYPES OF E-COMMERCE

• we distinguish types of e-commerce by who is selling to whom.

• They can be looked as subsets of these types of e-commerce.
1. BUSINESS-TO-CONSUMER (B2C)
2. BUSINESS-TO-BUSINESS (B2B)
3. CONSUMER-TO-CONSUMER (C2C)
4. MOBILE E-COMMERCE (M-COMMERCE)
5. Social e-commerce
6. LOCAL E-COMMERCE

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TYPES OF E-COMMERCE

✓ B2C
• The transaction that takes place between business and customers
• Is the most widely recognized form of e-commerce
• Within the B2C category, various business models exists including:
1. online retailers
2. service providers
3. transaction brokers
4. content providers
5. market creators, and portals

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TYPES OF E-COMMERCE to E-commerce
THE WORLDWIDE GROWTH OF B2C E-COMMERCE

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TYPES OF E-COMMERCE

✓ B2B

• Refers to the transactions and interactions that occur between businesses, rather
than between a business and individual consumers.
• Within the B2C category, various business models exists including:
1. Marketing service
2. sales service
3. technology service
4. customer service

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TYPES OF E-COMMERCE to E-commerce
THE WORLDWIDE GROWTH OF B2B E-COMMERCE

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TYPES OF E-COMMERCE

✓ C2C

• Refers to the transactions that occur directly between consumers

• In this model, individuals can buy, sell, or exchange goods and services with each other
• C2C e-commerce allows users to :
1. monetize their unused items
2. find second-hand goods at lower prices.
• increasing trust in peer-to-peer transactions
• empowers consumers and fosters a sense of community in online marketplaces.

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TYPES OF E-COMMERCE to E-commerce
THE WORLDWIDE GROWTH OF C2C E-COMMERCE

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TYPES OF E-COMMERCE

✓ M-COMMERCE

• Refers to the use of mobile devices to enable online transactions

• involves the use of:
1. cellular
2. wireless networks to connect to the Internet
Once connected, mobile consumers can:
1. purchase products and services
2. use an expanding variety of financial services
3. access online content, and much more.

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TYPES OF E-COMMERCE

✓ SOCIAL E-COMMERCE
• Refers to the use of social media platforms to facilitate online buying and selling activities
• It combines social networking features with e-commerce
• Allowing users to discover, share, and purchase products directly through platforms
• Like Instagram, Facebook, and Pinterest
• This model leverages user-generated content, such as reviews and recommendations
• It enhances brand visibility and encourages community interaction

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TYPES OF E-COMMERCE

✓ LOCAL E-COMMERCE

• That is focused on engaging the consumer based on her current geographic location
• Local merchants use a variety of online marketing techniques to drive consumers to
their stores
• It involves business and customer in the same region
• Like Uber

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TYPES OF E-COMMERCE to E-commerce
THE RELATIVE SIZE OF DIFFERENT TYPES OF E-COMMERCE In US

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TYPES OF E-COMMERCE to E-commerce
MAJOR TYPES OF E-COMMERCE

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Case study

Creator Economy
Streaming on Twitch

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Creator Economy

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Streaming on Twitch

• Target audience
• Competitor analysis
• Engagement
• Building the community
• Developing the brand
• Creativity
• Choosing the technology and infrastructure
• Choosing niche

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PERIODS IN THE DEVELOPMENT OF E-COMMERCE

What do you think about This Chart ?

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The Evolutions of E-Commerce ( 1995-Present)

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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

• It is hard to know E-Commerce

• It useful to think about e-commerce as involving three broad interrelated themes:
1. technology
2. business
3. society

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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

✓ TECHNOLOGY: INFRASTRUCTURE

• Need a basic understanding of technologies upon which it is built

• At the core of e-commerce are the Internet and the Web
• Underlying these are :
1. cloud computing
2. desktop computers
3. local area networks
4. databases
5. client/server
6. data mining/switches
7. enterprise wide information systems
8. supply chain management systems
9. manufacturing resource planning systems
10. CRM
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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

✓ BUSINESS: BASIC CONCEPTS

• New technologies present businesses and entrepreneurs

• New technologies change the strategies and plans of existing firms:
1. old strategies
2. new strategies need to be invented
• Need to be familiar with some key business concepts such as:
1. digital markets
2. business models
3. firm and industry value chains,
4. value webs
5. industry structure
6. digital disruption
7. consumer behavior

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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

✓ SOCIETY

• E-commerce is subject to the laws of nations and global entities

• Need to know the rules and legal in E-commerce
• Web exceptionally adept at tracking the identity and behavior of individuals online
• Then we should know the rules
• Copyright
• Privacy
• Public / Private

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ACADMIC DISCIPLNES CONCERNED WITH E-COMMERCE

✓ TECHNICAL APPROACHES

• Computer scientists focus on :

1. computer hardware
2. Software
3. telecommunications systems
• Operations management scientists focus on building mathematical models of business
• The information systems discipline spans the technical and behavioral approaches
• Technical groups focus on:
1. data mining
2. search engine design
3. and artificial intelligence.

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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

✓ BEHAVIORAL APPROACHES

• information systems researchers focus on

1. industry value chains
2. industry structure
3. corporate strategy
4. online consumer behavior.

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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

✓ BEHAVIORAL APPROACHES

• Economists have focused on:

1. online consumer behavior
2. pricing of digital goods
3. the unique features of digital electronic markets

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UNDERSTANDING E-COMMERCE ( ORGANIZING THEMES)

✓ BEHAVIORAL APPROACHES

• The marketing profession have focused on marketing

1. brand development and extension
2. online consumer behavior
3. the ability of e-commerce technologies to segment and target consumer groups
4. differentiate products.

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