03-03-2013

1
INTRODUCTION
E-Commerce
Anuj Shah (374)
Hardik Shah (376)
Harsh Shah (377)
Ankit Taparia (396)
Bhumin Shah (407)
E-Commerce
Electronic commerce
commonly known as
E-Commerce

Buying/selling of
product or service is
conducted over
Internet.

Evolution of e-Commerce
Three stages of evolution:
1. Innovation
2. Consolidation
3. Reinvention
Evolution of e-Commerce
Transaction ( in $ millions)
History
1979- A modified domestic TV to a real-time transaction
processing computer.
1982- Minitel was introduced in France.
1994- Netscape releases the Navigator browser. Pizza Hut
offers online ordering on its Web page and the first online
bank opens.
1998- PayPal comes into existence.
2002- Ebay acquires PayPal for $1.5 billion and changes the
scope of online shopping forever.
2003- After eight years, Amazon posts its first yearly profit.
2012- US Ecommerce and online retail sales are projected
to reach $226 billion (an increase of 12% over 2011).
Applications
03-03-2013
2
Amazon.com (B2C) ebay.in (C2C)
IndiaMart.com (B2B) priceline.com (C2B)
Advantages of Electronic Commerce
E-commerce increases sales and decreases costs
Virtual community
Increases purchasing opportunities
Identifies new suppliers and business partners
Efficiently obtains competitive bid information
Increases speed, information exchange
accuracy
Wider range of choices available 24 hours a
day
Advantages of Electronic Commerce
E commerce provides buyer opportunities
Wider range of choices
Easy way to customize the level of the information
Reduces the time buyers must wait for the
product

03-03-2013
3
Advantages of Electronic Commerce
Benefits extend to general society welfare
Lower costs to issue and secure:
Electronic payments of tax refunds
Public retirement
Welfare support
Provides faster transmission
Provides fraud, theft loss protection
Electronic payments easier to audit and monitor
Reduces commuter-caused traffic, pollution
Due to telecommuting
Products and services available in remote areas
14
Disadvantages of Electronic Commerce
Poor choices for electronic commerce
Difficult to get return-on-investment numbers
Technology and software issues
Recruiting and retaining employees
Cultural differences
Consumers resistant to change
Conflicting laws

14
Ecommerce Trade and Cycle
Consumer finds
something she wants to
buy at a shop on the Net
Consumer sends on
enciphered request for
payment to her bank
The electronic bank
sends back a secure
packet of e-cash
Consumer
sends the e-
cash to the
shop
Verification and
remittance of actual funds
Consumer
Public Key
The shop
sends the
packet of
cash to its
bank
Merchant Bank
Merchant
Server
Shop
Consumers Bank
Shop
1
3
6
2
5
4
CATEGORIES OF
E-COMMERCE
Classification of e-commerce
The classification of ecommerce is based:
who orders, the goods and services to be
sold,
who sold those goods and services and the
nature of transactions.
03-03-2013
4
Classification of e-commerce
Based on the above criteria, e-commerce are
classified as;
I. Business-to-Business (B2B) e-commerce
II. Business-to-Consumer (B2C) e-commerce
III. Consumer-to-Business (C2B) e-commerce
IV. Consumer-to-Consumer (C2C) e-commerce
V. Peer to Peer e-commerce
VI. M-commerce

Business-to-Business (B2B)
e-commerce
It is the largest form of ecommerce
In this form the buyers and sellers are both business
entities and do not involve and individual consumer.
It is commonly known as EDI (Electronic Data
Interchange).
According to the European model EDI Agreement
Article 2.1, EDI is the electronic transfer from
computer to computer, of commercial and
administrative data using an agreed standard to
structure an EDI message.
Examples:
Intel selling microprocessor to Dell
Heinz selling ketchup to Mc Donalds



1. Business-to-Business (B2B)
e-commerce (cont)
The companies include in the B2B
ecommerce are manufacturers, wholesalers
rather than retailers only.
Pricing is based on quantity of orders and is
often negotiable.
This type of ecommerce is privately held,
since only business companies can qualify
as potential buyers.
Advantages of B2B e-commerce
Some advantages of B2B ecommerce are;
Direct interaction with customers.
Focused on sales promotion.
Building customer loyalty.
Scalability
Savings in distribution costs
2.Business-to-Consumer (B2C)
e-commerce
In this e-commerce type, business and consumers
are involved.
Business sell to the public typically through catalogs
utilizing shopping cart software.
In Business-to Consumer (B2C) e commerce,
business must develop attractive electronic market
places to entice and sell products and services to the
consumer.
Example:
Dell selling me a laptop

Business-to Consumer (B2C)
e-commerce transaction process
Business-to Consumer (B2C) e commerce
transaction process includes;
Customer identifies a need.
Searches for the product or services to satisfy the
need.
Selects a vendor and negotiates a price.
Receives the product or services (delivery logistics,
inspection and acceptance).
Makes payment.
Gets service and warranty claims.

03-03-2013
5
3. Consumer-to-Business (C2B) e-
commerce
Also called demand collection model.
It enables buyers to name their own price, often
binding, for a specific good or services generating
demand
A consumer posts his project with a set budget
online and within outs; companies review the
customers requirements and bids out the project.
Then the customer will review the bids and selects
the company that will complete the project.

4. Consumer-to-Consumer (C2C)
e-commerce
It facilitates the online transaction of goods or
services between two peoples.
However, there is not visible intermediary involved,
but the parties cannot carry out the transactions
without the platform, which is provided by the online
market such as eBay.

Examples:
Advertisement of personal services over the internet.
Selling of knowledge and experts online.
C2C e-commerce (cont)
In the C2C e-commerce, the consumer lists items for sale with
commercial auction site.
The participants in C2C ecommerce are unknown, not trusted
parties to sell goods and services to anther one.
Example of C2C ecommerce web is eBay, where consumers
sell their goods and services to other consumers;
And PayPal (instead of purchasing goods and services directly
from the unknown, untrusted seller, the buyer can send money
to the PayPal.
Then the PayPal notifies the seller that they will hold the money
for them until the goods have been shipped and accepted by
the buyer).
5. Peer-to-Peer (P2P)
e-commerce
It is a technology in itself that helps people to directly
share computer files and computer resources
without having a central web server.
To use this, both the peers should have to install the
software so that they can communicate on the
common platform.

Examples:
Sharing of musics, videos, and other digital files
electronically
6. M-commerce
It refers to the use of mobiles devices for conducting
the transactions.
The mobile device holder can connect each other
and can conduct the business.
This is not really a type of e commerce but a
mechanism in transaction.
Many M-Commerce applications involve internet
enabled mobile devices. If such transactions are
targeted to individual, to specific location, at specific
times, they are referred as location base ecommerce
(L- Ecommerce).
7. E-Government
In E-Government a government departments
buys or sells goods, services or information
to business (G2B) or to the individual citizens
(G2C) or to other government entity (G2G).
03-03-2013
6
EDI
Electronic Data Interchange

the transfer of structured data ,by agreed
message standards ,from one computer
system to another ,by electronic means.

Benefits of EDI
Direct advantages:
Shortened ordering time
Cost cutting
Elimination of errors
Fast response
Accurate invoicing
EDI payment


Indirect advantages:

Reduced stock holding
Cash flow
Business opportunities
EDI Example
Elements of EDI

EDI standards
EDI networks
EDI implementation
EDI agreements

03-03-2013
7
EDI Standards
Data during interchange is:
Ready , formulated and available
Independent of hardware and software

EDI standards provide a common language
for the interchange of standard transactions
EDI Networks
Transmission can be done through:

Magnetic tapes
Direct data communications link
Value added data services(VADS)

EDI implementation
EDI software
EDI software VADS
Pens and
things
Packaging
soln.
Production
control
system
Order
processing
system







EDI Agreements
Trade Cycle
Conducting a commercial transaction involves the
following steps:
Pre-Sale:

Execution:


Settlement:


After-sales, e.g. warrantee and service

Trade Cycle
Conducting a commercial transaction involves the
following steps:
Pre-Sale:
Search - finding a supplier
Negotiate agreeing the terms of trade
Execution:


Settlement:


After-sales, e.g. warrantee and service

03-03-2013
8
Trade Cycle
Conducting a commercial transaction involves the
following steps:
Pre-Sale:
Search - finding a supplier
Negotiate agreeing the terms of trade
Execution:
Order
Delivery
Settlement:


After-sales, e.g. warrantee and service

Trade Cycle
Conducting a commercial transaction involves the
following steps:
Pre-Sale:
Search - finding a supplier
Negotiate agreeing the terms of trade
Execution:
Order
Delivery
Settlement:
Invoice
Payment
After-sales, e.g. warrantee and service

Generic trade cycles
The trade cycle varies depending on:
The nature of the parties to the transaction
The frequency of trade exchanges
The nature of the goods or services being exchanged.
Three generic trade cycles can be identified:
Regular, repeat transactions between commercial
trading partners (Repeat)
Irregular transactions between commercial trading
partners (Credit)
Irregular transactions in once-off trading relationships
(commercial or retail) (Cash)

Generic trade cycles

Repeat Credit Cash Trade Cycle:
Search
Negotiate
Order
Deliver
Invoice
Payment
After Sales
Pre-Sale
Execution
Settlement
After Sale
Future Scope