Вы находитесь на странице: 1из 7

BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

INTERNET AND E-COMMERCE

MEANING OF INTERNET
The word “Internet” is a combination of two words – (1) Inter-connection and (2) Network. Thus,
internet is the inter-communication system by which users (business partners) can transmit and receive
messages.

DIFFERENCE BETWEEN TRADITIONAL COMMERCE AND E-COMMERCE

POINTS OF DIFFERENCE TRADITIONAL COMMERCE E-COMMERCE

Barriers of business All business transactions are All business transactions are
transactions done by human beings done by computers.
Necessity Humans are necessary as they Computers are necessary as it
perform all business activities performs all business activities
Expenses Transaction cost is high because Transaction cost is low because
big space and many employees less space and few employees
are required to perform business are required to perform business
functions functions
Errors There are more chances of There are less chances of
mistakes as work is handled by mistakes as work is handled by
humans computers
Geographical place Geographical place is necessary Geographical place is less
to perform business functions important as business activities
are performed through internet
Investment It requires more investment It requires less investment as
because firms have to purchase large space is not required
or hire big space
Global business It is very difficult to do It is easy to do international
international business business through internet
Selection options Price and quality information of Price and quality information of
few products are available for many products are available on
the customers. Hence they have websites and hence customers
less options for selecting the can have many options for
product selecting the products
Time More time is required because Less time is required as work is
work is done by humans done by computers
Attracting customers Customers can be attracted to Customers can be attracted
visit shops and stores towards different websites
Purchasing It is in limited quantity It is in large quantity
Management It requires more time and It requires less time and money
money to manage to manage
Communication charges High postage, phone and Less postage, phone and dealing
dealing charges are incurred charges are incurred

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 1


BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

TYPES OF E-COMMERCE
The different types of E-commerce are:
1. Business-to-Business (B2B):
 B2B E-commerce is defined as E-commerce between two or more companies.
 For example, business transaction between a supplier of raw material (business) and
manufacturer (business) is known as B2B transaction.
 When MRF tyre company (supplier) sells wheels to Maruti Co. (Manufacturer of car), then
this transaction is called B2B transaction.
 About 80% of E-commerce is of this type, and most experienced people calculate and except
that B2B E-commerce will carry on to grow quicker than the B2C part.
 The B2B compenents are;
 Seller, buyer, intermediaries, internet network, information supply Cos etc.
 The benefits of B2B transactions are;
 Sales expenses are decreased. CISCO saved 17% of sales expenses in 1998.
 Customer services become more efficient because of online services and inquiries.
CISCO has increased its efficiency by 300%.
 Distribution of software expense is reduced.CISCO uses software on its website.
Hence, it saves expenses in distribution, packing and duplication. In India the most
successful professional websites are Rediff, Sity mall, Fabmart, Bazee India. Yahoo
etc.
 There is a decrease in expenses related to technical staff.
2. Business-to-Consumer (B2C):
 All business transactions done between a company and its customers are called B2C
transactions.
 In B2C transactions, Companies provide information on websites regarding buying and
selling activities. It helps the customers in buying products from companies online.
 For example, Titan Co. (Business) sells watches, belts and other fashion accessories to the
customers (Customers) online.
 If a consumer wants to buy any product online, there are many online retailers available. The
customer has to first log-in and then select a product on a particular website on which he
decides to purchase. The consumer can compare price and quality information on different
websites for the same product. There are many product reviews given by those customers
who have already purchased the product. This helps the customer in deciding whether to buy
the product or not.
 It is the second leading and the earliest type of E-commerce.
 There are many organisations performing B2C activities like Rediff shopping, Amazon,
Flipkart, Snapdeal, Shopclues etc.
3. Business-to-Government (B2G):
 B2G e-commerce transactions are done between business and government.
 Companies have to pay taxes to the government such as sales tax, income tax, excise duty,
land revenues etc.
 Companies can pay their taxes online without going to any government offices. Hence these
type of transactions are called B2G transactions.
 It becomes easy for the companies to do transactions with the government with the help of
internet.

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 2


BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

4. Consumer-to-Consumer (C2C):
 Consumer-to-consumer E-commerce or C2C is simply defined as the business between
private persons or consumers.
 Example: Suppose a particular customer wants to sell an old TV, he advertises for the sale of
this refrigerator by hiring a website and then requests people to send their offers of
purchasing the old TV. The interested persons will send their offers for old TV. The seller
will accept the offer if he likes it. Hence, the buying-selling transaction is started.
 E-auctions are also a trend on internet nowadays. Here too, a customer can sell his product to
another customer online.
 OLX, Quikr etc are different companies helping to perform C2C transactions. Customers can
buy and sell their products on these websites/apps.

5. Customer to Business (C2B):


 There are many websites that helps in performing C2B transactions.
 These transactions happen between customer and business
 Example: www.priceline.com is an example of C2B transaction. This website allows its
customers (airline travelers) to propose their affordable air-fare price to travel. Based on this
data, the website communicates with the airline services which accept the affordable fare
prices. In this business, priceline.com issues thousands of air tickets to its customers.

6. Government to Business & Government to Customers (G2B & G2C):


 Example: Government issues advertisements/notice for the last date of filing tax-returns or
last date of paying taxes etc. This is a government service given to businesses. Hence it is a
B2G transaction.
 Similarly, government also produces service for the customers online which is called G2C
transaction. For example, when a customer gets the facility of filing tax-returns through
online website, it becomes a G2C activity.

ADVANTAGES / MERITS OF E-COMMERCE


Benefits of E-commerce can be to;
1. Companies / Organisations
2. Customers / Consumers
3. Society

A. BENEFITS TO COMPANIES / ORGANISATIONS

1. Savings in Management expenses: In e-commerce the expenses regarding brokers and channel-
members is saved. Thus, there is a saving in managerial expenses. This can increase the profits
of the company.

2. Shops or Showrooms: In e-commerce, transactions are carried out on internet. Hence, there is
no need to set up any shop or showroom in different city. This helps in managing business with
limited investment.

3. Stock: Normally in traditional business, a merchant has to keep large amount of stock for sale so
that he can manage the demand-supply situation. But in e-commerce, it is not necessary to keep
whole stock at one place. The stock can be kept with different agencies at different places.

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 3


BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

Example – Amazon lists all the books on its websites but the books are not available at a single
place. They are all listed at one place but are kept with different agents situated at different place.
A customer has to just place an order on Amazon. Amazon will then direct the order to a nearby
agent from where the book can be sent to the customer. Hence, Amazon does not keep stock of
all books at a place. It only lists all the books on the website.

4. Less Investment: In e-commerce, it is not necessary to invest in big space/location,


shops/showrooms, stocks/inventory etc. This helps in reducing the investment in business.

5. Global market: E-commerce is managed through internet and internet is spread across the
world. Hence, with the help of internet, a business can expand its market across different
countries. Companies can get customers from the whole world.

6. Sales: On placing the products on websites, a company can get customers from the entire world.
This helps in increasing the sales of the company. For example, Amazon has its customers all
over the world.

7. Services: By using the website, more information can be given to customers and hence better
services are offered before and after the sale.

8. New products: Whenever a company launches a new product, it has to put more efforts to
introduce it in the market. But in e-commerce, this can be done very easily. The new products
can be put on website and the world can easily see them.

9. Business development: With the help or e-commerce, new business can be very easily
introduced and developed with less investment and efforts.

10. Other benefits: By using internet, the image can be built in the market, more goods and services
can be provided. It is easy to find suppliers and customers online. All business transactions can
be easily coordinated with the help of internet.

B. BENEFITS TO CUSTOMERS

1. Multiple Choice: A customer gets choice of many products on websites. He can compare
different information like price, quality etc through different websites before buying the product
online.

2. Economy in purchase: Consumer can easily compare price on different websites for buying
decision. He does not have to move from one shop to another physically. This saves his cost. For
example, if a customer wants to book a hotel room, then TRIVAGO compares different websites
and finds the best deal for the customer. Customer can then make his final decision based on
different price comparison.

3. Time saving: Customer does not have to move from one shop to another physically. This helps
in saving time for him.

4. Services: A customer can get best services before, during and after purchase given by different
dealers and he can select the best dealer who can provide the best services.

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 4


BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

5. Foreign items: A customer can buy products from any website from any country. Hence, a
customer can buy foreign goods also.

6. 24 hrs service: By using the internet the companies can be contacted at any time on all the days.
This is called 24x7 service.

7. Exchange with other consumers: Before buying any product, a customer can read the reviews
of other customers who have already purchased the product.

C. BENEFITS TO COMMUNITY / SOCIETY

1. Employment: Because of e-commerce, new employment opportunities have been created in the
field of computers, cyber-cafes, internet service providers etc. The problem of unemployment is
reduced to some extent.

2. Government revenue: Since large number of transactions take place on internet, there are more
chances of revenue for the government in the form of taxes like sales tax, vat, income-tax,
license fees, excise duty.

3. Education: Due to the use of internet, more technical staff is required. Hence, to fulfill the
demand of technical staff, technical education demand starts rising. For example, computer
science has come in demand due to rise of internet based business.

4. Industrial and Scientific progress: Because of the spread of e-commerce across the world,
many problems like pricing, packaging, distribution etc have been evolved. To solve these
problems, new technologies or scientific development became necessary. Hence, technology and
scientific progress has happened in last few years.

5. Upgradation of Product: Because of e-commerce, we are now able to buy many foreign made
products. If the quality of the product is good and innovative then we get inspired to improve the
quality of our products also. This has resulted into upgradation of products.

DISADVANTAGES / LIMITATIONS OF E-COMMERCE


Following are the limitations of e-commerce;

1. Spread of Internet: In India, only 5% of houses are having internet connections, 48% in
America and 55% in Singapore. Therefore, spread of e-commerce is very limited in a country
like India.

2. Lack of personal contact: In internet, buyer does not have any contact with the seller. The
buyer just buys from the internet by looking at websites. The buyer places an order on website
and the seller then sends the goods. Hence, there is a lack of direct contact with the seller. If the
product is defective, it becomes difficult for the buyer to get it replaced.

3. No opportunity of checking quality: In e-commerce there is no chance of touching the product


and checking its quality. Hence, it becomes difficult and risky to buy the products online.

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 5


BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

4. Inexperienced seller: It is very easy to enter into e-commerce business. Hence, there is a chance
that any new businessman can enter the business without knowing the pros and cons of e-
commerce. This may result into his business failure as he may not have enough knowledge to
run the business on intenet.

5. Confusion of selection: A buyer may get confused in selecting the product as there are many
choices and many websites on which the same type of products are available. Choice making
becomes very difficult under such circumstances.

6. Problems of returning goods: The process of returning goods is sometimes very difficult and
lengthy. It becomes difficult to return goods which are heavy and bulky.

7. Quality and Service problems: If the company does not take care about the quality of goods
and after sales service is poor, then usually customers do not desire to buy such goods. Hence,
the business may fail under such circumstances.

8. Less security of money: It is very difficult to have trust in making payment online. There are
many hackers operating online. This makes the payment process risky. Another problem is that if
the seller does not send the goods after getting the payment, then it is again risky for the buyer to
make payment online in advance.

9. Not for common man: Internet and its facility is not enjoyed by poor class of people as they do
not have enough money to use such facility. Hence, they cannot afford to buy products through
internet. E-commerce transaction is limited to upper class of people mostly.

10. Global market problems: Some companies belonging to certain countries may sell their
products at lower price as the labour charges in those countries are very low. At these prices, the
other countries may not afford to sell their products. Under this situation, those countries cannot
become successful in selling products online. E-commerce cannot progress.

OPPORTUNITIES OF ECOMMERCE
Ecommerce is fast expanding all over the world. There is a lot of opportunities for Indian Software
professionals and service companies to get benefit out of this situation. Following are some of the
important opportunities of E-commerce;
1. Financial services: From the research done on number of companies, it is found that many
people will come for financial services and guidance through internet.

2. Stock Exchange: Trading of shares on stock exchange through internet is a great opportunity for
stock exchanges. A person can buy and sell shares through internet. He does not have to remain
present physically to buy or sell shares.

3. Banking Services: Internet banking is developing now. Most of the Indian banks have done
developed internet based banking activities. For example, people now perform banking activities
on internet. They buy products and make payment through internet.

4. Legal and Professional Services: Indian companies have many opportunities in the field of
Legal and professional services. There is a need for legal and professional services from rules

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 6


BUSINESS ADMINISTRATION, FY BCOM, Sem 2, VNSGU

and legal provisions right from starting internet based businesses and in all other fields of e-
commerce.

5. Tourism Services: There is a lot of opportunities for tourism services also. It is now easy to
book tickets of flights and trains through the use of internet. Hotel rooms can also be booked
through internet.

6. Medical services: People all over the world including government spend large amount of money
on health related services. Hence the Indian companies have large opportunities in this field.
Medical transcription is an important area of medical services through internet.

==================================THE END===============================

Dr. Zakir Patel, Prof, NLCCM, Navsari – 2017 7

Вам также может понравиться