E-Commerce: Definition, Types and Trends

E-Commerce: Definition,
Types and Trends
Your Introduction




Your Name
Place of Internship
Your short term and long term goals
Your interests and hobbies

My introduction
•
•
•
•
B.E, MBA(systems),CCNA,PMP with 15 years
IT industry experience
Vice President of PMI Mumbai
Skills: Portfolio and Program management,
project management, IT infrastructure
management, Service delivery
Visiting faculty for many institute across the
country
E-commerce: Definition
Traditional business process:







Conduct market research to identify customer
needs.
Create product or service that will meet
customer's needs.
Advertise and promote product or service
Negotiate a sale transaction, including:
* Delivery logistics
* Inspection, testing and acceptance
Ship goods and Invoice customer
Receive and process customer payments
Provide after-sales support, maintenance and
warranty service.
E-commerce: Definition
Started in 1983 at Boston
Exchange by Alax Randall
Computer
http://www.youtube.com/watch?v=wan896ZO4aY




Actually started with EDI(1960s)
Too many docs( invoice, Pos,bill of landing…all
have same set of info) and lots of time and
money
Process: Entering data into computers, printing
paper forms and reentering at other side, each
with their unique format
Set of standards created for exchanging data
electronically
E-Business
•
•
•
•
One of the first to use the term was IBM, when,
in October, 1997, it launched a thematic
campaign built around the term
e-business can be said to include e-service, the
provision of services and tasks over the Internet
by application service providers
One of the first to report sales in the millions of
dollars directly from the Web was Dell Computer
Exploiting the convenience, availability, and
world-wide reach of the Internet, many
companies, such as Amazon.com, the book
sellers, have already discovered how to use the
Internet successfully
E-commerce: Definition
No widely accepted definition. In loose
sense it means doing business over the
internet, selling products [goods and
services] which are delivered offline as
well as products which can be “digitalized”
and delivered on line.
“e-commerce is the online transaction of
business, featuring linked computer systems
of the vendor, host and buyer. Electronic
transactions involve the transfer of
ownership or rights to use a good or
service” [US Department of Commerce]
E-commerce: Scope
E-commerce is a sub-set of e-business
E-business: application of ICT to all aspects of
companies operations: i.e. customer relations management
(CRM); enterprise resource planning (ERP); sales force
management (SFM); electronic procurement (EP)
E-commerce: Functions



Communication [on-line catalogue]
Transaction [shopping carts: browse and select
items and make buying decision]
Payment [electronic payment methods]
E-commerce Characteristics



Operates on a bona fide basis [no
arrangement between customer and seller]
prior
Operates over the Internet; using all or any
combination
of
technologies
designed
to
exchange data [email, mobile phone, EDI]; to
access data [share databases or electronic
bulleting boards]; and to capture data [bar
coding and magnetic or optical character readers
Requires buyer adhering to a contract [I
AGREE, I DON’T AGREE
E-commerce Market Structure

Portal
(POR):

Market Maker (MMK): Facilitates business

Product/service
Engages in building a
community of consumers of information about
products. Focal points for influencing the channel
traffic into web sites managed by providers.(e.g
ebay.in as a portal)
transactions that take place between supplier and
buyer, and provides value through a system of
implicit or explicit guarantee of security and
trust.(e.g ebay as a company)
Provider
(PSP):
Conduct directly business over the internet,
customized information systems and business
processes.(e.g Apple, Sony etc)
E-commerce: Elements





A good or service to be offered
Customer needs to know how to find
the product [marketing, portals]
Exchange of money [electronic or
conventional financial transactions]
Delivery mechanism [on-line, offline]
Customer service and communication
EC framework





People
Public Policy
Marketing and advertisement
Support Services
Business partnerships
E-commerce: Elements

Ecommerce in action
E-commerce and Broader Internet Applications
Government
G2G
Government
Business
Consumer
e.g.
coordination
Business
G2B
Consumer
G2C
e.g. information e.g. information
B2G
B2B
B2C
e.g.
procurement(
tenders)
e.g. ecommerce(in
diamart.com)
e.g. ecommerce(eb
ay,amazon)
C2G
C2B
C2C
e.g. taxes
Source OECD (2000)
e.g. price
e.g. auction
comparisons(pri markets(ebay
cline.com)
and amazon)
EC Classification










B2B2C(Wholesale-retail-consumer)
Peer-to-peer applications
Mobile Commerce
Intrabusiness EC
B2E(part of Intrabusiness EC)
Collaborative Commerce(M&S)
Exchange to Exchange
Egovernment
Non business EC
E-Learning
EC Drivers

Digital Revolution
•
•
•
•

Internet, intranets, extranets, computers, software
A vast array of digitized products
Financial transactions digitally
Microprocessors and networking capabilities in physical
goods
Business Environment
•
•
•
•
Economical, technical, social and legal factors
Change at very fast pace, you need to be ready to adopt
Problems and opportunities due to this change
More competitive products faster with less resources
Business Models

A method of doing business by which a company
can generate revenue to sustain itself

Value chain concept (e.g Wal Mart, TV broadcast)

One company can have multiple buz models

A subset of business plan or business case

Weill and Vitale(2001) developed for evaluating
viability of e-business initiatives
Business Models

As per Mckay and Marshall(2004), it contains…

A description of a customer and company's
relationship with the customer

Description of all products and services that
company will offer

A description of business process

List of resources required


A description of organization supply chain
Revenue, cost, sources of financing and
estimated profitability
Business Models













Online direct marketing(Amazon, Walmart)
Electronic tendering systems(GE-reverse auction)
Name your own price
Find the best price
Affiliate marketing
Viral Marketing
Group purchasing
Online auctions
Product and service customization
Electronic market places and exchanges
Value chain integrators
Value chain service providers
Information brokers
Revenue Models






Sales (Wal-Mart)
Transaction fees(Stock market)
Subscription fees(Airtel broadband)
Advertising fees (Google)
Affiliate rates (Ebay and Amazon)
Other revenue sources(play games or watch
sports online for a fee)
EC Successes

Virtual EC companies such as Ebay, google,
yahoo, Verisign, AOL, checkpoint

Click and Mortar companies- Cisco, GE,IBM, Intel
and Schwab

Startups like loy.com, drugstore.com, ftd.com,
campusfood.com
EC Failures

Useem 2000, Perkins and perkins 2001, Carton
2002, Kaplan 2002

B2C failures: eToys, expeditor, Marchfirst,
Drkoop.com,webvan.com and boo.com

B2B failures: Chemdex.com, ventro.com,
verticalnet.com
E-Commerce: Advantages








Being able to conduct business 24 x 7 x
365
Access the global marketplace
Speed
Opportunity to reduce costs
Computer platform-independent
Efficient
applications
development
environment
Allowing customer self service and
'customer outsourcing‘
Stepping beyond borders to a global view
E-Commerce: disadvantages









Time for delivery of physical products
Physical product, supplier & delivery
uncertainty
Perishable goods
Limited and selected sensory information
Returning goods
Privacy, security, payment, identity,
contract.
Defined services & the unexpected
Personal service
Size and number of transactions
E-Commerce: Key Success
factors







Selection and value
Performance and service
Look and feel
Advertising and Incentive
Personal attention
Community Relationships
Security and Reliability
E-Commerce: Impact





Widening global digital divide
Changes in the business regulations
90% of the internet users are in
industrialized
countries
as
US and
Canada(57%)
Internet users in Middle east and Africa
only 1%
Technical, legal and governance issues
E-Commerce: Strategy







Online vs offline strategy
Speed of transactions
Appropriate amount of resources for
advertising
Integration of ecommerce components
with the overall site design
Multiple
ways
to
communicate
for
customers
Search capability that really works
Home or an index page on website
E-Commerce: Examples
E-Commerce: Examples
E-Commerce: Examples
E-Commerce: Videos





http://www.youtube.com/watch?v=wan89
6ZO4aY
http://www.youtube.com/watch?v=IZp_X
5IQgIU
http://www.youtube.com/watch?v=LW4X3
b_j0eE
http://www.youtube.com/watch?v=OY2tc
Q574Ew
http://www.youtube.com/watch?v=5G7b8
6a_r1U