E-Commerce

Introduction

Electronic commerce, commonly written as E-Commerce, is the trading or facilitation of trading in products or services using computer networks, such as the Internet or online social networks. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge. 

-It is commonly known as electronic marketing. 

-consist of buying and selling goods and services over an electronic system such as the internet. 

-E-commerce is the purchasing, selling & exchanging goods and services over computer network or internet through which transactions or terms of sale are performed electronically.

Evolution of E-Commerce

1970: Electronic Funds Transfer (EFT)

--Used by the banking industry to exchange account information over secured networks.

The late 1970s and early 1980:

--Electronic Data Interchange (EDI) for e-commerce within companies.

--Used by businesses to transmit data from one business to another. 

The 1990s:

--The World Wide Web on the internet provides easy-to-use technology for information publishing and dissemination.

--Cheaper to do business (economies of scale)

--Enable diverse business activities (economies of scope)

Some Common Applications of E-Commerce

• Document automation in supply chain and logistics 
• Domestic and international Payment systems 
• Automated online assistants 
• Online shopping and order tracking 
• Online banking 
• Online office suites 
• Shopping cart software 
• Electronic tickets

Types of E-Commerce

Business-to-Business (B2B):  B2B E-commerce is simply defined as commerce between companies. About 80% of e-commerce is of this type. Example: Intel selling microprocessor to Dell, Heinz selling ketchup to Mac.

Business-to-Consumer (B2C):  Business-to-Consumer E-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods or receiving products over an electronic network. Example: Dell selling me a Laptop.

Business-to-Government (B2G):  Business-to-Government E-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. Example: Business pay taxes, file reports, or sell goods and services to Govt. agencies.

Consumer-to-Consumer (C2C): Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers. Example: Mary buying an iPod from Tom on eBay, Me selling a car to my neighbor.

Mobile commerce (M-commerce): M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones. Example: Mobile Ticketing, Information Services, Mobile Banking.

Unique Features of E-Commerce Technology

universal standards: One set of technology standards: Internet standards.

Effect:

o Disparate computer systems easily communicate with each other

o Lower market entry costs—costs merchants must pay to bring goods to market

o Lower consumers’ search costs—effort required to find suitable products

Global Reach: The technology reaches across national boundaries, around Earth.

Effect:

o Commerce-enabled across cultural and national boundaries seamlessly and without modification

o includes, potentially, billions of consumers and millions of businesses worldwide

Richness:  Supports video, audio, and text messages

Effect:

o Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people

o Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience 

Digital wallet: Stores credit card and owner identification information and enters the shopper’s name, credit card number, and shipping information automatically when invoked to complete a purchase.

• Micropayment systems: 
• Developed for purchases of less than $10 
• Accumulated balance digital payment systems 

Key Factors of success in E-Commerce

• Providing value to customers 
• Providing service and performance 
• Quality of products 
• Providing security 
• Advertising 
• Providing a 360-degree view of the customer relationship

Advantages of E-Commerce

§Quick and easy

§24X7 open to the customers

§Can easily select product without moving around physically

§Up-to-Date Company material

§Shop from anywhere in the world

§Lower communication costs

§Consumer Reviews

Limitations of E-Commerce Technology

• Unable to check products personally 
• Sometimes the problem with the Quality 
• The mechanical cause can cause unpredictable effects on the total process 
• The possibility of credit card number theft 
• Not everyone is connected to the Internet 
• On average only 1/9th of stock is available

Conclusion

Although E-Commerce has some limitations now it becomes a very important part of our business sectors. The Internet has lead to the birth and evolution of E-commerce. E-commerce has now become a key component of many organizations in the daily running of their business. As the Internet and in turn E-commerce has developed, and continues to evolve and grow, it is vital that any organization, in any particular industry, must base its strategic planning around such a rapidly growing medium.