E-Commerce

CSC330 4(3,1)

Lecture 2

Part 1: Introduction to E-Commerce

Chapter 1: Introduction to E-Commerce
Recap
 Instructor Profile
 Objective
 Assessment Scheme
 Reading Material
 Theory and Lab
 Course Content
 The First Thirty Seconds
 Why You Should Study E-Commerce?
 Introduction to E-Commerce
 E-Commerce versus E-Business

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Topics
 E-Commerce: A Brief History
 Precursors (before e-commerce)
 E-Commerce 1995 – 2000: Invention
 E-Commerce 2001 – 2006: Consolidation
 E-Commerce 2007 – Present: Reinvention
 Technological Building Blocks Underlying E-Commerce
 Internet, Web, and Mobile Platform
 Unique Features of E-Commerce Technology
 Ubiquity, Global Reach, Universal Standards, Information
Richness, Interactivity, Information Density, Personalization and
Customization, and Social Technology

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E-Commerce: A Brief History
 Precursors (before e-commerce)
 E-Commerce 1995 – 2000: Invention
 E-Commerce 2001 – 2006: Consolidation
 E-Commerce 2007 – Present: Reinvention

Precursors (before e-commerce)

 Baxter Healthcare, a pharmaceutical firm initiated in 1970s an old
form of commerce by using a telephone-based modem that
permitted hospitals to reorder supplies from the Baxter healthcare.
 Later expanded during 1980s into a PC-based remote order
entry system.
 In 1980s, Electronic Data Interchange (EDI) standards developed
that allowed exchanging of commercial documents and conduct
digital commercial transactions across private networks.

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E-Commerce: A Brief History…

Precursors (before e-commerce)…

In 1981, first truly large-scale digitally enabled transaction system
Minitel French Video Text System introduced that combined a
telephone with an 8-inch screen.
 By mid 1980s, more than 3 million had been deployed, with
more than 13,000 different services available.
 Including ticket agencies, travel services, retail products, online
banking, and so on.
 Minitel service continued in existence until 31st December 2006,
then it was finally discontinued by its owner.

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E-Commerce: A Brief History…

1995 - 2000: Invention

Focused on technology-driven approach.
During this invention period, e-commerce meant selling goods,
usually quite simple goods.
There simply was not enough bandwidth for more complex products.
Static display ads.
Marketing was limited.
Not very powerful search engines.

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E-Commerce: A Brief History…

1995 - 2000: Invention…

Friction-Free Commerce
 A vision of commerce in which…
 Information is equally distributed.
 Transaction costs are low.
 Prices can be adjusted easily.
 Intermediaries (market middleman) decline.
 Unfair competitive advantages are eliminated.

But this period of e-commerce came to close in 2000, when thousand

of companies disappear (dot-com bubble crash).

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E-Commerce: A Brief History…

2001 - 2006: Consolidation

Emphasis on business-driven approach, rather than being
technology-driven approach.
Brand extension (providing services) become more important, rather
than creating new brands.
Growth of search engine advertising.
Business Web presences expand.
 Not just on websites, but also through e-mail, display ads, and
search engine campaigns.
E-commerce in this period was growing again by more than 10% a
year.

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E-Commerce: A Brief History…

2007 - Present: Reinvention

Mobile technology enables social, local, and mobile e-commerce.
E-commerce has been transformed by rapid growth of:
 Web 2.0 - a set of applications and technologies that enable the
user-generated content.
 Such as online social networks, blogs, video and photo

sharing sites, and wikis.

 Extensive adoption of mobile devices.
 Such as smartphones and tablet computers.

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Periods in Development of E-Commerce

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Technological Building Blocks Underlying
E-Commerce
 Internet
 “Worldwide network of computer networks, build on common
standards”.
 Mobile Platform
 Provides ability to access internet from a variety of mobile
devices (smartphones).
 Web
 Known as the World Wide Web (WWW).
 “An information system running on internet infrastructure that
provides access to billions/trillions of web pages”.
 Types of Web - surface web, deep web, and dark web.
 Surface Web: almost 5% of content on the web.
 Deep Web and Dark Web: almost 95% of content on the

web.

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Technological Building Blocks Underlying
E-Commerce…
 Web…
 Surface Web
 Search Engines (Google, Bing, etc.), Social Media Platforms

(Facebook, Twitter, Instagram, etc.), E-Commerce Sites

(Amazon, eBay, etc.), Entertainment Sites (YouTube etc.),
Blogs, Wikipedia etc.
 Deep Web
 Internet Banking, Financial Records, Government
Resources, Scientific Reports, Research Papers, Medical
Records, and Hidden Wikis.
 Dark Web
 Tor/Onion Encrypted Sites, Political Protests, Anonymous

Sites, and Silk Road (online black market).

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Technological Building Blocks Underlying
E-Commerce…
 Web...

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Unique Features of E-Commerce
Technology
 E-commerce technologies provide eight unique features that have
impacted the conduct of business.
1. Ubiquity
2. Global Reach
3. Universal Standards
4. Information Richness
5. Interactivity
6. Information Density
7. Personalization and Customization
8. Social Technology

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Unique Features of E-Commerce
Technology…

1. Ubiquity
 Available everywhere and anytime.
 Internet / Web technology is available everywhere; at work, at
home, and elsewhere round the clock.

2. Global Reach
 Total number of users or customers can access an e-commerce
business across the cultural, regional, and national boundaries.

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Unique Features of E-Commerce
Technology…

3. Universal Standards
 Technical standard of conducting e-commerce.
 Shared by all nations around the world.
 Reduce search costs (effort required to find suitable products).
 Price discovery becomes simpler, faster, and more accurate.

4. Information Richness
 Unlimited information of a product is available through video,
audio, and text messages.

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Unique Features of E-Commerce
Technology…
5. Interactivity
 Technology that allows for two-way communication between
seller and buyer.
 Community forums, and social networks with social sharing
functionality.
 Example:
 Comments, Like and Share functionality on social media.
 Using a chat window to interact with technical support at a
seller’s website.

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Unique Features of E-Commerce
Technology…

6. Information Density
 Total amount and quality of information available to all market
stakeholders (buyer, seller, and manufacturer).
 Reduce search costs (effort required to find suitable products).

7. Personalization and Customization

 Personalization – targeting of marketing messages to
specific individuals by adjusting the message to a person’s
name, interests, and past purchases.
 Customization - changing the delivered product or service
based on a user’s preferences.

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Unique Features of E-Commerce
Technology…

8. Social Technology
 Much more social by allowing users to create and share
content with a worldwide community.
 E-commerce technologies have evolved users to create and
generate content in the form of web (web forum), social media
platform, text, video, music and photos with worldwide
communities.

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Summary
 E-Commerce: A Brief History
 Precursors (before e-commerce)
 E-Commerce 1995 – 2000: Invention
 E-Commerce 2001 – 2006: Consolidation
 E-Commerce 2007 – Present: Reinvention
 Technological Building Blocks Underlying E-Commerce
 Internet, Web, and Mobile Platform
 Unique Features of E-Commerce Technology
 Ubiquity, Global Reach, Universal Standards, Information
Richness, Interactivity, Information Density, Personalization and
Customization, and Social Technology

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