Note for E-Commerce - EC By Chandrakanta Mahanty

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PEIT5301 E-COMMERCE (3-0-0) Module –I (Lecture Hour 11) Basics of E-commerce Basic Elements, of e-commerce, e-commerce framework, basic infrastructure for ecommerce: Technical, capital, media, Human Resource, Public policy Technical Infrastructure Internet connectivity, protocols, web server, software for web server, e-commerce software, security threats to e-commerce, protecting e-commerce system Module –II (Lecture Hour 12) Payment System for E-commerce Online payments system, pre-paid and post-paid electronic payment systems, Electronic data interchange (EDI) Business Models for E-commerce Revenue Model, Business model based on strategies, Marketing on the web: Internet based Advertisement, Website usability, consumer oriented e-commerce Module –III (Lecture Hour 12) Internet Business Strategies Electronic marketplaces, Electronic Auctions, Mobile Commerce, Virtual Communities Textbooks 1. Ecommerce, Gary P. Schneider, Cengage Learning 2. Electronic Commerce: Framework Technologies & Applications, Bharat Bhasker, TMH Reference Books 1. Electronic Commerce: A Manager’s Guide, Kalakota & Whinston, Pearson 2. E-commerce, Jibitesh Mishra, Macmillan 3. E-commerce: Concepts, models & strategies, C.V.S Murthy, Himalaya Publishing

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E- Commerce- Module 1 Introduction to E-Commerce E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the need of business organizations, vendors and customers to reduce cost and improve the quality of goods and services while increasing the speed of delivery. Electronic commerce (or e-commerce) also includes many other activities, such as businesses trading with other businesses and internal processes that companies use to support their buying, selling, hiring, planning, and other activities. Electronic commerce in broader sense called as electronic business (or e-business). NOTE: Companies that operate only online are often called dot-com or pure dot-com businesses to distinguish them from companies that operate in physical locations. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce refers to the paperless exchange of business information using the following ways:  Electronic Data Interchange (EDI): Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper. Example: Electronically exchange documents (such as purchase orders, invoices, shipping notices etc.  Electronic Mail (e-mail): It is a method of exchanging digital messages from an author to one or more recipients.  Electronic Bulletin Boards: Electronic bulletin boards (also known as message boards or as computer forums) are online communication systems where one can share, request, or discuss information on just about any subject. E-mail is a way to converse privately with one or more people over the Internet; electronic bulletin boards are public.  Electronic Fund Transfer (EFT): Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, through computer-based systems and without the direct intervention of bank staff. Notes prepared by Asst. Professor Chandrakanta Mahanty {chandra.mahanty@gmail.com} 1

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Features of E-Commerce E-Commerce provides the following features:  Non-Cash Payment: E-Commerce enables the use of credit cards, debit cards, smart cards, electronic fund transfer via bank's website, and other modes of electronics payment.  24x7 Services availability: E-commerce automates the business of enterprises and the way they provide services to their customers. It is available anytime, anywhere.  Advertising/Marketing: E-commerce increases the reach of advertising of products and services of businesses. It helps in better marketing management of products/services.  Improved Sales: Using e-commerce, orders for the products can be generated anytime, anywhere without any human intervention. It gives a big boost to existing sales volumes.  Support: E-commerce provides various ways to provide pre-sales and post-sales assistance to provide better services to customers.  Inventory Management: E-commerce automates inventory management. Reports get generated instantly when required. Product inventory management becomes very efficient and easy to maintain.  Communication improvement: E-commerce provides ways for faster, efficient, reliable communication with customers and partners. Traditional Commerce is the process of buying, selling or exchanging products, services or information, is usually physical, meaning there is the existence of a physical store. E-commerce v/s Traditional Commerce Key elements E-commerce Traditional commerce Competitive edge Speed Differentiation Accessibility 24 x 7 Limited time Customer interface Screen-to-face Face-to-face Customer interaction Self-service Seller influenced Customization One-to-one Mass customization customization Product promotion Word of mouth Merchandising & personal selling Product characteristic Commodity Perishables, feel and touch Sales Channels Enterprise-InternetManufacturer-WholesalerConsumer Retailer-Consumer Market Space Network Store OR Traditional Commerce v/s E-Commerce Traditional Commerce E-Commerce Information sharing is made easy via Heavy dependency on information exchange electronic communication channels making a from person to person. little dependency on person to person information exchange. Communication/transactions are done in Communication or transactions can be done synchronous way. Manual intervention is in asynchronous way. The whole process is required for each communication or completely automated. transaction. Notes prepared by Asst. Professor Chandrakanta Mahanty {chandra.mahanty@gmail.com} 2

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Communications of business depends upon individual skills. No uniform platform for information sharing, as it depends heavily on personal communication. In e-commerce, there is no human intervention. E-commerce provides a universal platform to support commercial/business activities across the globe. ADVANTAGES OF E-COMMERCE The advantages of e-commerce can be broadly classified into three major categories:  Advantages to Organizations  Advantages to Consumers  Advantages to Society Advantages to Organizations  Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe.  E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information. E-commerce improves the brand image of the company. E-commerce helps organizations to provide better customer service. E-commerce helps to simplify the business processes and makes them faster and efficient. E-commerce reduces the paper work. E-commerce increases the productivity of organizations. Advantages to Customers  It provides 24x7 support. Customers can enquire about a product or service and place orders anytime, anywhere from any location.  E-commerce application provides users with more options and quicker delivery of products.  E-commerce application provides users with more options to compare and select the cheaper and better options.  A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.  It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.  E-Commerce increases the competition among organizations and as a result, organizations provide substantial discounts to customers. Advantages to Society Customers need not travel to shop a product, thus less traffic on road and low air pollution.  E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.  E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.  E-commerce helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in an improved manner. DISADVANTAGES OF E-COMMERCE The disadvantages of e-commerce can be broadly classified into two major categories:  Technical disadvantages  Non-technical disadvantages Technical Disadvantages Notes prepared by Asst. Professor Chandrakanta Mahanty {chandra.mahanty@gmail.com} 3