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E-Commerce
• Transformation of economic activity into digital media
- Exchange information, content, agreements, and services among parties that
are connected to through the Internet.
• Enables new ways of creating, delivering and capturing value to
customers.
- Availability
- Convenience
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What is E-commerce
• Distributing, buying, selling and marketing products and services over
electronic systems
• E-business for commercial transactions
• The trading or facilitation of trading in products or services using computer
networks, such as the Internet
• Involves supply chain management, e-marketing, online marketing, EDI
• Uses electronic technology such as:
- Internet
- Extranet/Intranet
- Protocols
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Key technologies
• Mobile commerce
• Electronic funds transfer
• Supply chain management
• Internet marketing
• Online transaction processing
• Electronic data interchange (EDI)
• Inventory management systems
• Automated data collection systems
Mobile Commerce
• The delivery of electronic commerce capabilities directly into the
consumer’s hand, anywhere, via wireless technology
• Services such as money transfer, location based services, mobile
banking, ticketing etc.
Internet marketing
• Uses the Internet to deliver promotional marketing messages to
consumers
• Search engine marketing (SEM), social media marketing, many types
of display advertising (including web banner advertising), and mobile
advertising
Online shopping
• e-tail, e-web-store, e-shop, e-store, Internet shop, web-shop, web-
store, online store, online storefront and virtual store
• evokes the physical analogy of buying products or services at a bricks-
and-mortar retailer or shopping center
• The largest of these online retailing corporations are Alibaba,
Amazon.com, and eBay
Open marketplace
• An online marketplace (or online e-commerce marketplace) is a type
of e-commerce site where product or service information is provided
by multiple third parties, whereas transactions are processed by the
marketplace operator.
• A darknet market or cryptomarket is a commercial website on the
dark web that operates via darknets such as Tor or I2P. They function
primarily as black markets, selling or brokering transactions involving
drugs, cyber-arms, weapons, counterfeit currency, stolen credit card
details, forged documents, unlicensed pharmaceuticals, steroids,
other illicit goods as well as the sale of legal products.
Payment
• Online shoppers commonly use a credit card or a PayPal account in
order to make payments.
• Alternative means:
• Cash on delivery
• Wire transfer
• BitCoin
• Disadvantages
• Security issues such as identity theft, phishing, spyware
• Hidden cost
• Privacy issue
Dotcom bubble
• The dot-com bubble was a historic speculative bubble covering
roughly 1997–2000
• The period was marked by the founding (and, in many cases,
spectacular failure) of several new Internet-based companies
commonly referred to as dot-coms.
• The "dot-com bubble" was also called the dot-com boom, the
Internet bubble, the dot-com collapse, and the information
technology bubble.
Distribution Channels
• Pure-click or pure-play companies are those that have launched a
website without any previous existence as a firm.
• Bricks-and-clicks companies are those existing companies that have
added an online site for e-commerce.
• Click-to-brick online retailers that later open physical locations to
supplement their online efforts.
Digital Economy
• Digital economy refers to an economy that is based on digital
computing technologies.
• The digital economy is also sometimes called the Internet Economy,
the New Economy, or Web Economy
Forces Shaping the Digital Age
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Forces Shaping the Digital Age
• Digitalization & Connectivity
• Intranets : connect people within a company.
• Extranets : connect a company with its suppliers, distributors, and outside
partners.
• Internet : connects users around the world.
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Definitions
• Internet:
- A collection of computers that speak a common language – protocol
• Intranet:
- Private version of the Internet
- Main purpose to share company information and computing resources
among employees
• Extranet:
- Private network that users outside the company can access
- Requires security and privacy
- Collaborate with other companies
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Forces Shaping the Digital Age
• New Types of Intermediaries:
• Direct selling via the Internet bypassed existing intermediaries
(disintermediation).
• “Brick-and-mortar” firms became “click-and-mortar” companies.
• As a result, some “click-only” companies have failed.
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Forces Shaping the Digital Age
• Customization and Customerization:
• With customization, the company custom designs the market offering for the
customer.
• With customerization, the customer designs the market offering and the
company makes it.
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E-commerce Today
• The Internet is the perfect vehicle for e-commerce because of its
open standards and structure.
• No other methodology or technology has proven to work as well as
the Internet for distributing information and bringing people together.
• It’s cheap and relatively easy to use it as a medium for connecting
customers, suppliers, and employees of a firm.
• No other mechanism has been created that allow organizations to
reach out to anyone and everyone like the Internet.
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E-commerce Today
• The Internet allows big businesses to act like small ones and small
businesses to act big.
• The challenge to businesses is to make transactions not just cheaper
and easier for themselves but also easier and more convenient for
customers and suppliers.
• It’s more than just posting a nice looking Web site with lots of cute
animations and expecting customers and suppliers to figure it out
• Web-based solutions must be easier to use and more convenient than
traditional methods if a company hopes to attract and keep
customers.
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Four Categories of E-Commerce
Business originating from...
Business Consumers
And selling
to...
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Distinct Categories of E-Commerce
Business to Business (B2B) refers to the full spectrum of e-
commerce that can occur between two organizations.
This includes purchasing and procurement, supplier
management, inventory management, channel management,
sales activities, payment management &service and support.
Examples: FreeMarkets, Dell and General Electric
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Distinct Categories of E-Commerce (cont’d)
Peer to Peer (C2C) exchanges involve transactions between and among
consumers. These can include third party involvement, as in the case of the
auction website Ebay.
Examples: Owners.com, Craiglist, Monster
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Key Drivers of E-commerce
• Technological – degree of advancement of telecommunications
infrastructure
• Political – role of government, creating legislation, funding and
support
• Social – IT skills, education and training of users
• Economic – general wealth and commercial health of the nation
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Key Drivers of E-business
• Organizational culture- attitudes to R&D, willingness to innovate and
use technology
• Commercial benefits- impact on financial performance of the firm
• Skilled/committed workforce- willing and able to implement and use
new technology
• Requirements of customers/suppliers- in terms of product and service
• Competition- stay ahead of or keep up with competitors
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