E-commerce refers to the buying and selling of goods and services over electronic systems like the internet. It has grown significantly since the early internet days and first dot-com bubble. There are various types of e-commerce including business-to-consumer, business-to-business, consumer-to-consumer, and business-to-government. E-commerce provides advantages to merchants like decreased costs, extended reach to customers, and increased efficiencies. It has evolved from early electronic transactions to today's global, multi-billion dollar industry dominated by established companies. Mobile commerce is seen as the next evolution of digital commerce.
E-commerce refers to the buying and selling of goods and services over electronic systems like the internet. It has grown significantly since the early internet days and first dot-com bubble. There are various types of e-commerce including business-to-consumer, business-to-business, consumer-to-consumer, and business-to-government. E-commerce provides advantages to merchants like decreased costs, extended reach to customers, and increased efficiencies. It has evolved from early electronic transactions to today's global, multi-billion dollar industry dominated by established companies. Mobile commerce is seen as the next evolution of digital commerce.
E-commerce refers to the buying and selling of goods and services over electronic systems like the internet. It has grown significantly since the early internet days and first dot-com bubble. There are various types of e-commerce including business-to-consumer, business-to-business, consumer-to-consumer, and business-to-government. E-commerce provides advantages to merchants like decreased costs, extended reach to customers, and increased efficiencies. It has evolved from early electronic transactions to today's global, multi-billion dollar industry dominated by established companies. Mobile commerce is seen as the next evolution of digital commerce.
E-commerce refers to the buying and selling of goods and services over electronic systems like the internet. It has grown significantly since the early internet days and first dot-com bubble. There are various types of e-commerce including business-to-consumer, business-to-business, consumer-to-consumer, and business-to-government. E-commerce provides advantages to merchants like decreased costs, extended reach to customers, and increased efficiencies. It has evolved from early electronic transactions to today's global, multi-billion dollar industry dominated by established companies. Mobile commerce is seen as the next evolution of digital commerce.
OBJECTIVES What is Electronic Commerce (e-commerce)? Define and differentiate between the types of e-commerce
Discuss the development and growth of e-commerce
Discuss the pros and cons of e-commerce
WHAT IS E-COMMERCE? The buying and selling of products or services over electronic systems. Eg. The Internet Formal Definitions include: The use of the internet to facilitate, execute and process business transactions. Business transactions involve a buyer, a seller and the exchange of goods or services for money. (Delone & Mclean 2004) Digitally enabled commercial transactions between and among organizations and individuals. (Laudon & Traver 2009) WHY E-COMMERCE? The technology involved in E-Commerce has dramatically changed how commerce is done. E-Commerce and the Digital Economy total contribution to GDP is bigger than the GDP of Canada It accounts for over 3.4% GDP in the G8 and the five other high performers in this arena (Brazil, India, China, S. Korea and Sweden) Internets contribution to GDP has doubled in last 5 years to 21% so it is still growing UNIQUE FEATURES OF E-COMMERCE 1. Ubiquity (24/7 availability from everywhere connectivity exists). Currently over 2 billion people (40% world pop.) have access to the internet worldwide. 2. Global reach (crosses cultural/national/linguistic boundaries) 3. Based on standards eg. TCP/IP, HTML, RSA (defacto standard for industrialized encryption) 4. Information availability (about markets, environment, customers, competitors) 5. Interactivity (ability to simulate face-to-face experience from/to anywhere) 6. Social Networking (connectivity to daily life and behaviour) FIGURE 1-2 Electronic commerce categories
TYPES OF E-COMMERCE: MARKET
Category Description Example
Businesses sell products or services to Walmart.com sells merchandise to consumers
Business-to-consumer (B2C) individual consumers. through its Web site. Businesses sell products or services to Grainger.com sells industrial supplies to large and Business-to-business (B2B) other businesses. small businesses through its Web site. Businesses and other organizations maintain and use information to identify Dell Computer uses secure Internet and evaluate customers, suppliers, and connections to share current sales and sales Business processes that support buying and employees. forecast information with suppliers. The selling activities Increasingly, businesses share this suppliers can use this information to plan their information in carefully managed ways own production and deliver component parts to with their customers, suppliers, Dell in the right quantities at the right time. employees, and business partners. Participants in an online marketplace can buy and sell goods to each other. Consumers and businesses trade with each Consumer-to-consumer (C2C) Because one party is selling, and thus other in the eBay.com online marketplace. acting as a business, it can be treated as part of B2C electronic commerce. Businesses sell goods or services to governments and government agencies. CA.gov procurement site allows businesses to sell Business-to-government (B2G) Can be treated as part of B2C electronic online to the state of California. commerce. TYPES OF E-COMMERCE: TECHNOLOGY Client/Server Users connect to a server (typically over an HTTPS connection) to conduct the transaction Cloud Scalable provision of E-Commerce services and infrastructure through 3rd parties or via internal data centres Peer-to-Peer (P2P) Users share files/resources with each other and without central control Mobile commerce (M-commerce) Use of mobile networks as the electronic medium for transactions Largest growing sector BUSINESS-TO-CONSUMER Consumer accesses merchant website Modeled on traditional shopping
Shopping cart used to hold goods until checkout
Checkout is defined as order and payment processing
Post-sale communication to confirm order, payment, shipping
information and delivery BUSINESS-TO-BUSINESS Manages transactions between firms for services and goods Services include logistics, procurement, hosting
Sale of goods between organizations such as raw materials for
manufacturing and finished products for resale Often uses extranets: shared intranets hosting vendors, contractors, suppliers and key customers CONSUMER-TO-CONSUMER Allows consumers to sell to each other. Can be done through listings or auctions
Consumer: Prepares product for market Places product for auction or sale Market maker provides catalogue, search, transaction processing BUSINESS-TO-GOVERNMENT Shares similarities with both B2B and B2C Organizations can pay taxes, file papers, etc
Government can procure goods and services
Uses a combination of extranets and the internet
Huge potential for savings through efficiencies, decreases in
administration overhead, etc THE DEVELOPMENT AND GROWTH OF E-COMMERCE Technology and drugs have always existed in an easy symbiosis: the first thing ever bought and sold across the Internet was a bag of marijuana. In 1971 or 1972, students at Stanford Universitys Artificial Intelligence Laboratory used ARPANETthe earliest iteration of the Internetto arrange a marijuana deal with their counterparts at the Massachusetts Institute of Technology. (https://medium.com/matter/19f753fb15e0) Electronic Funds Transfers (EFTs) Wire transfers Transfer of account exchange information over private communication networks Electronic Data Interchange (EDI) Transfer of computer-readable data in a standard format to another organization Organizations that engage in EDI with each other as Trading Partners Value-added network (VAN) Independent firm that offers connection and transaction-forwarding services to buyers and sellers engaged in EDI E-COMMERCE: THE 1ST WAVE AND THE BUBBLE Characteristics of the 1st wave Dominance U.S. businesses English was primary language Capitalization through outside investors Over-reliance on advertising for revenue Over-reliance on first-mover advantages DOT.COM BUBBLE BURST
Between 1997 and 2000 over 12,000 internet-related businesses
were started with over 100 billion in investments More than 5000 went out of business in the downturn that started in 2000 Why? Bad ideas given good money
Policy of growth over profit expending too much on market
dominance Over-value of stocks due to hype
9/11
Outsourcing (from US)
E-COMMERCE: THE 2ND WAVE Global enterprises from multiple countries participating Established companies fund e-commerce with own capital
E-commerce sites available in multiple languages
More complex advertising and better integration with existing
business processes and strategies Not as reliant on first-mover advantage GROWTH OF E-COMMERCE Second Wave B2C sales estimated at USD1.2 Trillion internationally in 2013
Sales have been growing by ~ 20% annually
In US, B2B sales (559 Billion) account for double that of B2C (252 Billion) M-COMMERCE: THE NEXT EVOLUTION Sales of PC devices have dropped with a dramatic increase in mobile device sales such as smartphones and tablets http://www.gartner.com/newsroom/id/2610015 Mobile website traffic has been increasing while traditional connections decreasing
T-commerce???? E-COMMERCE ADVANTAGES (MERCHANT) Decreased information costs Extended reach
Just in time operations
Addition Business Process Re-engineering (BPR) options
Decreased transaction costs
Increased efficiencies
Decreased service costs
E-COMMERCE ADVANTAGES (CONSUMER) Greater access to information Comparative shopping
Price
Convenience
Time savings
Customization
Virtual Auctions
Interactions with other consumers (Virtual communities)
E-COMMERCE ISSUES Critical mass Attracting consumer attention
Personal contact
Trust
Security
Privacy
Legal
Taxes
Infrastructure
Certain types of goods (perishables) those with low value-to-weight
ratios are more difficult to sell over the internet SUMMARY E-commerce The buying and selling of products or services over electronic systems. Eg. The Internet E-business internet technologies are used to enhance processes within the firm. 1st Wave of E-Commerce Ended in 2000 2nd Wave of E-Commerce New approaches to integrating Internet technologies into business processes SUMMARY Different types of E-commerce B2B, B2C, B2G, C2C The nature of E-commerce has led to many opportunities and challenges for both Merchants and Consumers
