Introduction To E-Commerce

Introduction to E-Commerce
What is Commerce?
• Transactions (sales and purchases) having the
objective of supplying commodities (goods and
services
• Exchange of items of value between persons or
companies.
• These exchange of items do not need to occur
physically in a single location, and transactions
made over the Internet — also known as
ecommerce.
Various Roles in Commerce
1. Buyers
– Those with money who have intention to purchase a good
or service.
2. Sellers
– Those who offers goods and services to buyers.
– Sellers could be Retailers of Wholesalers/Distributors.
3. Retailers
– The one who sell directly to consumers
4. Wholesalers / Distributors
– The one who sell to retailers and other businesses.
5. Producers
– Those who create the products and services that sellers
offer to buyers, i.e. also known as manufactures.
What is E-commerce?
• Electronic commerce or e-commerce refers to a wide
range of online business activities for products and
services.
• It also pertains to any form of business transaction in
which the parties interact electronically rather than by
physical exchanges or direct physical contact.
More formally:
• E-commerce is defined as use of electronic
communications and digital information processing
technology in business transactions to create, transform,
and redefine relationships for value creation between or
among organizations, and between organizations and
individuals
E-commerce Trends 2010-2019
• Social networking continues to grow
• Social e-commerce platform emerges
• Online consumer sales return to growth
• Mobile computing begins to rival PC
• Explosive growth in online video viewing
• Continued privacy and security concerns
Facebook:
The New Face of E-Commerce?
Class Discussion
• Do you use Facebook, and if so, how often? What

has the experience been like?
• Have you purchased anything based on an
advertisement on Facebook or by using a link
provided by a friend?
• Are you concerned about the privacy of the
information you have posted on Facebook?
E-commerce vs. E-business
• In e-commerce, information and communications
technology (ICT) is used in inter-business or inter-
organizational transactions (transactions between
and among firms/organizations) and in business-to-
consumer transactions (transactions between
firms/organizations and individuals).
• In e-business, on the other hand, ICT is used to
enhance one’s business. It includes any process
that a business organization (either a for-profit,
governmental or non-profit entity) conducts over a
computer-mediated network.
E-commerce vs. E-business
• E-commerce is actually a subset of E-business.
It means using the Internet to order and pay for
products and services, while E-business covers
a broader range of activities that could take
place via e-mail or the web.
More formally:
• E-business is the transformation of an
organization’s processes to deliver additional
customer value through the application of
technologies, philosophies and computing
paradigm of the new economy.
Benefits of E-business
The benefits of E-business are vast. To name a
few:
– E-marketing – improve external product promotion
and internal communications
– E-commerce – increase sales
– E-meeting – reduce communication and travel cost
utilizing online meeting tools
– Customer Relationship Management (CRM) –
maximize lead conversion, track and monitor
interactions with clients
– Collaborative Tools & Virtual Workspace – Improve
supplier relations and productivity
– Integrated Back Office Systems – streamline
business processes
Why Study E-commerce?
• E-commerce technology is different, more
powerful than previous technologies
• E-commerce bringing fundamental changes
to commerce
• Traditional commerce:
– Passive consumer
– Sales-force driven
– Fixed prices
– Information asymmetry
Unique Features of E-commerce
Technology
1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology
Types of E-commerce
• Classified by market relationship
– Business-to-Business (B2B)
– Business-to-Consumer (B2C)
– Business-to-Government (B2G)
– Consumer-to-Consumer (C2C)
• Classified by technology used
– Peer-to-Peer (P2P)
– Mobile commerce (M-commerce)
The Growth of B2B E-commerce
SOURCES: Based on data from U.S. Census Bureau, 2010; authors’ estimates.
The Growth of B2C E-commerce
SOURCES: Based on data from eMarketer, Inc., 2010; authors’ estimates.

Technology and E-commerce in
Perspective
• The Internet and Web: Just two of a long list
of technologies that have greatly changed
commerce
– Automobiles
– Radio
• E-commerce growth will eventually cap as it

confronts its own fundamental limitations.
Potential Limitations on the Growth
of B2C E-commerce
• Expensive technology
• Sophisticated skill set
• Persistent cultural attraction of physical
markets and traditional shopping
experiences
• Persistent global inequality limiting
access to telephones and computers
• Saturation and ceiling effects
The Internet
• Worldwide network of computer networks
built on common standards
• Created in late 1960s
• Services include the Web, e-mail, file

transfers, etc.
• Can measure growth by looking at number

of Internet hosts with domain names
The Growth of the
Internet, Measured
by Number of
Internet Hosts with
Domain Names
SOURCE: Internet Systems Consortium,
Inc. , 2010.
The Web
• Most popular Internet service
• Developed in early 1990s
• Provides access to Web pages
– HTML documents that may include text,
graphics, animations, music, videos
• Web content has grown exponentially
– Google indexes between 75 – 100 billion
pages
E-commerce: A Brief History
• 1995-2000: Innovation
– Key concepts developed
– Dot-coms; heavy venture capital investment
• 2001-2006: Consolidation
– Emphasis on business-driven approach
• 2006-Present: Reinvention
– Extension of technologies
– New models based on user-generated content,
social networks, services
Early Visions of E-commerce
• Computer scientists:
– Inexpensive, universal communications and
computing environment accessible by all
• Economists:
– Nearly perfect competitive market and friction-free
commerce
– Lowered search costs, disintermediation, price
transparency, elimination of unfair competitive
advantage
• Entrepreneurs:
– Extraordinary opportunity to earn far above normal
returns on investment – first mover advantage
Assessing E-commerce
• Many early visions not fulfilled
– Friction-free commerce
• Consumers less price sensitive
• Considerable price dispersion
– Perfect competition
• Information asymmetries persist
– Disintermediation
– First mover advantage
• Fast-followers often overtake first movers
Predictions for the Future
• Technology will propagate through all commercial
activity.
• Prices will rise to cover the real cost of doing business.
• E-commerce margins and profits will rise to levels more
typical of all retailers.
• Cast of players will change.
– Traditional Fortune 500 companies will play dominant role.
– New startup ventures will emerge with new products, services.
• Number of successful pure online stores will remain
smaller than integrated offline/online stores.
• Regulatory activity worldwide will grow.
• Cost of energy will have an influence.
Understanding E-commerce:
Organizing Themes
• Technology:
– Development and mastery of digital computing
and communications technology
• Business:
– New technologies present businesses with new
ways of organizing production and transacting
business
• Society:
– Intellectual property, individual privacy, public
welfare policy
The Internet and the Evolution of Corporate Computing
Academic Disciplines Concerned
with E-commerce
• Technical • Behavioral
approach approach
– Computer science – Information systems
– Management – Economics
science – Marketing
– Information – Management
systems – Finance/accounting
– Sociology
Assignment 1:
Part I: Answer the following:
1. Why do you think investors today would be
interested in investing in or purchasing e-
commerce companies?
2. Is e-commerce any different than traditional
markets with respect to privacy?
3. How do you protect your privacy on the Web?
Part II
On your own opinion, list down and describe at
least 5 future ecommerce trend in the year 2020
and beyond
Assignment 1:
• Use short MS-Word Document. Indicate
your Name, Date and Subject at the top of
the first page.
• Use Font: Arial size 12. Margin: 1” all sides.
• Submit your work to Elearn on or before
Thursday, November 14, 2019 @4:30PM.
Late submission will not be accepted.

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Introduction to E-Commerce

• Do you use Facebook, and if so, how often? What

SOURCES: Based on data from eMarketer, Inc., 2010; authors’ estimates.

• E-commerce growth will eventually cap as it

• Created in late 1960s

• Services include the Web, e-mail, file

• Can measure growth by looking at number

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