E-COMMERCE

Electronic commerce, commonly known as e-commerce or eCommerce, or e-

business consists of the buying and selling of products or services over electronic systems such
as the Internet and other computer networks. The amount of trade conducted electronically has
grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this
way, spurring and drawing on innovations in electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data collection systems.
Modern electronic commerce typically uses the World Wide Web at least at some point in the
transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as
well.

A large percentage of electronic commerce is conducted entirely electronically for virtual items
such as access to premium content on a website, but most electronic commerce involves the
transportation of physical items in some way. Online retailers are sometimes known as e-
tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic
commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-

business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited
to specific, pre-qualified participants (private electronic market). Electronic commerce that is
conducted between businesses and consumers, on the other hand, is referred to as business-to-
consumer or B2C. This is the type of electronic commerce conducted by companies such
as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly
online to the seller's computer usually via the internet. There is no intermediary service. The sale
and purchase transaction is completed electronically and interactively in real-time such as
Amazon.com for new books. If an intermediary is present, then the sale and purchase transaction
is called electronic commerce such aseBay.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists
of the exchange of data to facilitate the financing and payment aspects of the business
transactions.
Early development
The meaning of electronic commerce has changed over the last 30 years. Originally, electronic
commerce meant the facilitation of commercial transactions electronically, using technology
such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were
both introduced in the late 1970s, allowing businesses to send commercial documents
like purchase orders or invoices electronically. The growth and acceptance of credit
cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of
electronic commerce. Another form of e-commerce was the airline reservation system typified
by Sabre in the USA and Travicom in the UK.

From the 1990s onwards, electronic commerce would additionally include enterprise resource
planning systems (ERP), data mining and data warehousing.

An early example of many-to-many electronic commerce in physical goods was the Boston
Computer Exchange, a marketplace for used computers launched in 1982. An early online
information marketplace, including online consulting, was the American Information Exchange,
another pre Internet online system introduced in 1991.

In 1990, Tim Berners-Lee invented the WorldWideWeb web browser and transformed an
academic telecommunication network into a worldwide everyman everyday communication
system called internet/www. Commercial enterprise on the Internet was strictly prohibited until
1991.[1] Although the Internet became popular worldwide around 1994 when the first internet
online shopping started, it took about five years to introduce security protocols
and DSL allowing continual connection to the Internet. By the end of 2000, many European and
American business companies offered their services through the World Wide Web. Since then
people began to associate a word "ecommerce" with the ability of purchasing various goods
through the Internet using secure protocols and electronic payment services
BUSINESS APPLICATIONS
Some common applications related to electronic commerce are the following:

 Email
 Enterprise content management
 Instant messaging
 Newsgroups
 Online shopping and order tracking
 Online banking
 Online office suites
 Domestic and international payment systems
 Shopping cart software
 Teleconferencing
 Electronic tickets

FEATURES OF E-COMMERCE

• E-commerce websites have to exert an image of vibrancy, competitiveness and

efficiency. For that a powerful website builder software has to be selected.

• The pages have to be search optimized if you want your site to be visible in search
engines at a higher position.

• Integration of the website with PayPal would help accept real-time credit card processing
instantly.

• The templates of the site should be designed professionally and there should be space to
accommodate catalogues prepared in Excel.

• The site has to be integrated with other websites using HTML editor, which involves
allotting codes to web pages.
ADVANTAGES

The greatest and the most important advantage of e-commerce, is that it enables a business
concern or individual to reach the global market. It caters to the demands of both the national and
the international market, as your business activities are no longer restricted by geographical
boundaries. With the help of electronic commerce, even small enterprises can access the global
market for selling and purchasing products and services. Even time restrictions are nonexistent
while conducting businesses, as e-commerce empowers one to execute business transactions 24
hours a day and even on holidays and weekends. This in turn significantly increases sales and
profit.

Electronic commerce gives the customers the opportunity to look for cheaper and quality
products. With the help of e-commerce, consumers can easily research on a specific product and
sometimes even find out the original manufacturer to purchase a product at a much cheaper price
than that charged by the wholesaler. Shopping online is usually more convenient and time saving
than conventional shopping. Besides these, people also come across reviews posted by other
customers, about the products purchased from a particular e-commerce site, which can help
makepurchasingdecisions.

For business concerns, e-commerce significantly cuts down the cost associated with marketing,
customer care, processing, information storage and inventory management. It reduces the time
period involved with business process re-engineering, customization of products to meet the
demand of particular customers, increasing productivity and customer care services. Electronic
commerce reduces the burden of infrastructure to conduct businesses and thereby raises the
amount of funds available for profitable investment. It also enables efficient customer care
services. On the other hand, It collects and manages information related to customer behavior,
which in turn helps develop and adopt an efficient marketing and promotional strategy.
Disadvantages

Electronic commerce is also characterized by some technological and inherent limitations which
has restricted the number of people using this revolutionary system. One important disadvantage
of e-commerce is that the Internet has still not touched the lives of a great number of people,
either due to the lack of knowledge or trust. A large number of people do not use the Internet for
any kind of financial transaction. Some people simply refuse to trust the authenticity of
completely impersonal business transactions, as in the case of e-commerce. Many people have
reservations regarding the requirement to disclose personal and private information for security
concerns. Many times, the legitimacy and authenticity of different e-commerce sites have also
beenquestioned.

Another limitation of e-commerce is that it is not suitable for perishable commodities like food
items. People prefer to shop in the conventional way than to use e-commerce for purchasing food
products. So e-commerce is not suitable for such business sectors. The time period required for
delivering physical products can also be quite significant in case of e-commerce. A lot of phone
calls and e-mails may be required till you get your desired products. However, returning the
product and getting a refund can be even more troublesome and time consuming than
purchasing, in case if you are not satisfied with a particular product.

Thus, on evaluating the various pros and cons of electronic commerce, we can say that the
advantages of e-commerce have the potential to outweigh the disadvantages. A proper strategy to
address the technical issues and to build up customers trust in the system, can change the present
scenario and help e-commerce adapt to the changing needs of the world.
Types of E-commerce

Business-to-business

Business-to-government

Business-to-consumer “Consumer Electronic Commerce”

or “Retail Electronic Commerce”

Government-to-consumer

Consumer-to-consumer

B2B - Business to Business

B2B is the selling between companies, wholesale rather than retail. But it means more than that.
Efficient use of capital demands small inventories, which entails anticipating demand, and so
maintaining detailed information flows between all parties involved in today's complex
manufacturing processes. B2B involves widening the circle of suppliers (for safety and
competition), and of centralizing control (for records and discounts).

B2B ecommerce is an important part of any online business. Leaving aside the simple transfer of
funds — covered here — many businesses need some combination of:

 creditworthiness assessment.
 guarantee of quality and delivery of goods (escrow services).
 safeguards against fraud.
 fast collection of funds, with ability to vary the collection period.
 reporting: approval of sale, invoicing, delivery, payment.
 procedures to handle disputes.
 Information of all types — corporate, technical, identity-building — has to be
interchanged across the scattered divisions of large companies, and new ideas fostered,
assessed and disseminated. Speed is vital, as are improved communication, collaboration,
 and customer understanding. All these requirements can be handled by IT, and software
has been developed to meet the challenge — customer relationship management,
enterprise resource planning, online auction, supply chain management, etc. Little of it is
off-the-shelf, but is devised as systems to be extended and built round individual company
requirements.

B2C - Business to Consumer

B2C (Business to Consumer): Refers to a business communicating with or selling to an

individual rather than a company. B2C e-commerce jumped from $11.2 billion in 1998 to $31.2
billion in 1999,

Doing business online no longer requires a huge investment by retailers, thanks to developments
in template-based online stores which are based on packaged applications that are delivered over
the internet.

As nearly all online stores will require the same functions: catalogues, order baskets, payment
processing, content management and member management, it makes sense for those components
to be created once and shared by all stores, with each store effectively ‘renting’ its own copy of
the applications.

The one area where it's important for online stores to differentiate is their look and feel, and
naturally retailers feel very strongly about their business branding. So the ability to create a
unique ‘skin’ for each site is an important part of a template-based e-store offering.

Using the latest internet application technology, individual sites can be created within minutes of
the retailer selecting a template and supplying graphics such as logos. Typically, retailers will
pay only a modest monthly rental charge – and retailers require no specialist hardware or
software, other than internet access.

Anyone who wants to sell products and services over the internet, or who wants customers to be
able to research their purchases on the internet, should consider an online store.

These days, a web site should be a standard part of the promotional and advertising mix for
every business, along with other tools such as Yellow Pages, newspaper advertising and signage.

Advantages of B2C e-commerce

B2C e-commerce has the following advantages:

 Shopping can be faster and more convenient.

 Offerings and prices can change instantaneously.
 Call centers can be integrated with the website.
 Broadband telecommunications will enhance the buying experience.

Challenges faced by B2C e-commerce

The two main challenges faced by B2C e-commerce are building traffic and sustaining customer
loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it
difficult to enter a market and remain competitive. In addition, online shoppers are very price-
sensitive and are easily lured away, so acquiring and keeping new customers is difficult.

B2E - Business to Employee

B2E (Business to Employee) E-Commerce generally refers to the requisitioning of supplies by

employees for use in their jobs, but this really has grown to encompass much more. For
example, B2E makes it very easy for an employee to requisition a new toner cartridge and
printer paper - the order is entirely electronic, and supervisors are asked to approved the
requisition in the event that the total order exceeds preset limits for that particular employee.
However, B2E has grown into technologies that allow the employee to access their employee
records to update address information, shift investments in the 401K plan, or maintain their
internal resume. Many companies have found that B2E technologies have dramatically
reduced the administrative burdens with the human resources department. Admittedly,
maintaining employee information has little to do with commerce, but this term has grown to
encapsulate this activity into the B2E definition.
C2B - Consumer to Business

A consumer posts his project with a set budget online and within hours companies review the
consumer's requirements and bid on the project. The consumer reviews the bids and selects
the company that will complete the project. Elance empowers consumers around the world by
providing the meeting ground and platform for such transactions

C2B is a rather peculiar Internet phenomenon. An example of C2B e-commerce could be the
following. A student wants to fly from London to New York, but has only £200 ($320) in the
bank to pay for this round trip. They put up an ad in an Internet C2B site, seeking airlines that
are willing to offer the transatlantic round trip for £200 or less. The beauty of the Internet is
that it brings together a large number of customers to create a marketplace that a number of
airlines (that will have to otherwise fly with empty seats) will be interested in.

Many analysts state that C2B and C2C e-commerce will thrive in the near future. It is a
challenging task, however, to construct these e-commerce systems because of their diverse
nature. The existing EC construction tools, which usually focus on B2B and B2C e-
commerce schemes, were designed for constructing specific e-commerce systems, making
them unsuitable for developing consumer-initiated e-commerce systems. In this paper, we
propose a trading model that supports C2B and C2C e-commerce through the use of digital
media called “vouchers” and the trading system “VTS”. We show how the introduction of
vouchers simplifies the procedures of C2B and C2C e-commerce, and show that vouchers,
together with VTS, can be utilized to form a trading framework that uniformly realizes the
delivery/payment phase. We demonstrate that a wide range of matching phase
implementations, in which the characteristics of specific e-commerce systems such as market
coordination are implemented, can be integrated into this framework.

C2C - Consumer to Consumer

independent society. Consumers are no longer totally reliant on corporations and are
increasingly looking to conduct their own business transactions. This is evident in Western
Australia where the number of small businesses has doubled from 1983 to 1999 (Australian
Bureau of Statistics, 2001). At the forefront of this movement are Consumer-to-Consumer
(C2C) applications within eBusiness. C2C applications are any transactions between and
amongst consumers (QUT School of International Business, 2003, p. xv). They are often
described as Peer-to-Peer (P2P) (QUT School of International Business, 2003, p. xv). When
eCommerce was first introduced, it redefined the traditional structure of business by giving
small firms and individuals the same opportunity as multi-national corporations. As a result,
many individuals established online organizations that encouraged and assisted commerce
between consumers.

There are many sites offering free classifieds, auctions, and forums where individuals can buy
and sell thanks to online payment systems like PayPal where people can send and receive
money online with ease. eBay's auction service is a great example of where person-to-person
transactions take place everyday since 1995.
Companies using internal networks to offer their employees products and services online--not
necessarily online on the Web--are engaging in B2E (Business-to-Employee) ecommerce.

G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-

Business), B2G (Business-to-Government), G2C (Government-to-Citizen), C2G (Citizen-to-
Government) are other forms of ecommerce that involve transactions with the government--
from procurement to filing taxes to business registrations to renewing licenses. There are other
categories of ecommerce out there, but they tend to be superfluous.
The most famous and successful example of a Consumer-to-Consumer application is Ebay.
Ebay.com is an online auctioning site that facilitates the trade of privately owned items
between individuals (May, 2000, p.109). The website claims that through Ebay, “practically
anyone can trade practically anything� (Ebay, 1995-2004). The company began in
September 1995 when Pierre Omidyar decided to establish the first online marketplace (Ebay,
1995-2004). Since that time, the company has continued to grow both in size and popularity.
Ebay is now considered one of the most successful C2C eBusinesses ever.

Other examples of Consumer-to-Consumer applications are service and employment websites

such as Monster.com, Seek.com.au and CareerOne.com.au. These websites provide a valuable
service to consumers looking for jobs. Employers can advertise on these websites and potential
employees can contact their organization for an interview.

Web-based communication organizations are one final example of a C2C operation. Sites such
as Sastashopping.com ICQ.com and MSN.com act as a communications medium for peer-to-
peer deliberations. Although there is no commercial benefit to the website, they do provide the