2What is it?Buying and selling of products or services over electronic systems such as the Internet and other computer networks (Intranet).It’s more than just online shopping
3E-Commerce?E-Commerce is sharing business information, maintaining business relationships and conducting business transaction by means of telecommunications networkIt is conducting the exchange of information using a combination of structures and unstructured messages across the entire range of networking technologiesThe Internet’s WWW has been the prime driver of contemporary E-commerceE-commerce enables organizations of all sizes and in all market sectors to improve their competitiveness
4Traditional Vs. Electronic Traditional commerce:Firms engages in many other activities in addition to buying and selling their productTraditional commerce include: buyers and sellers using old fashion method to do businessElectronic Commerce:Firms has used various electronic communications tools to conduct different kinds of business transactions.Electronic Commerce use technology to moves people around the world
5Applications Supply chain management Video on demand Remote banking Procurement and purchasingOnline marketing and advertisementHome shoppingAuctions
6Examples of E-commerce ATMSelling physical goods using websites (example: clothes, shoes, flowers, electronics, etc)Reserving a hotel room, flight, rental car
7In-Frastructure Information superhighway infrastructure Internet, LAN, WAN, routers, etc.telecom, cable TV, wireless, etc.Messaging and information distribution infrastructureHTML, XML, , HTTP, etc.Common business infrastructureSecurity, authentication, electronic payment, directories, catalogs, etc.
8Main Areas of E-Commerce Business to Business (B2B)Transactions conduced between businesses on the webBusiness to Consumer (B2C)Consumer shopping on the webBusiness to Government/Government to Business (B2G/G2B)Consumer to Business (C2B)
9B2B (Business to Business) Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers.Pricing is based on quantity of order and is often negotiable.
10C2B (Consumer to Business) A consumer posts his project with a set budget online and within hours companies review the consumer’s requirements and bid on the projectThe consumer review’s the bids and chooses the company that will do the project
11C2C (Consumer to Consumer) There are many sites offering free classifieds, auctions, and forums where individuals can buy and sellPayPal: people can send and receive money
12B2C (Business to Consumer) Businesses selling to the general public through catalogues utilizing shopping cart software.By dollar amount, B2B wins, however B2C is what the average consumer has in mind when it comes to e-commerce
13Advantages Increase sales and decrease sales costs A small firm's promotional message out to potential customers in every country in the world with good adReach narrow market segments that are geographically scatteredIncreases sales opportunities for seller, it also increases purchasing opportunities for the buyersBusinesses can identify new suppliers and business partnersProvides buyers with a wide range of choices than traditional commerce
14Advantages Increased sales Decreased costs Being in the space Reach narrow market segments in geographically dispersed locationsCreate virtual communitiesDecreased costsHandling of sales inquiriesProviding price quotesDetermining product availabilityBeing in the space
15BenefitsThe market for a Web based is not bound by any geographical constraintsThe transaction cost go down tremendously in a well set up siteBetter, more inviting, convenient and comprehensive presentation of goods is conducive to greater salesSmall and large firms alike have the opportunity to set-up and conduct business on the internet.An inexpensive advertising medium for organizations, it allows organizations an opportunity for publicizing their products and services at minimal cost.
16Importance of E-Commerce Decrease in cost of ordering and supplyBetter contact between customer and supplierExploration of new markets (rural customers can buy global products)Easy to use and customer friendly
17Benefit SocietyElectronic payments of tax refund, public retirement, and welfare support cost less to issue and arrive securely and quickly when transmitted over the InternetElectronic payments can be easier to audit and monitor than payments made by check, providing protection against fraud and theft lossesElectronic commerce enables people to work form home
18DisadvantagesMany products and services require that a critical mass of potential buyers be equipped and willing to buy through the Internet.Costs and benefits have been hard to quantifyMany firms have had trouble recruiting and retaining employees with the technological, design, and business process skills needed to create an effective electronic commerceFirms also have difficulty of integrating existing database and transaction-processing software designed for traditional commerce into the software that enables electronic commerceFirms also face cultural and legal obstacles to conducting electronic commerce
19DisadvantagesLoss of ability to inspect products from remote locationsRapid developing pace of underlying technologiesDifficult to calculate return on investmentCultural and legal impediments
20Barriers Access and Connectivity Authentication and Standardization Cyber LawsTechnology
21Risks Business practices Information protection Transaction Integrity Privacy and TrustGlobal Efforts Towards Retaining Privacy & Building TrustWeb TrustTRUSTeP3P (Privacy Preferences Project)
22E-Commerce risks Customer's risks Stolen credentials or password Dishonest merchantDisputes over transactionInappropriate use of transaction detailsMerchant’s riskForged or copied instrumentsDisputed chargesInsufficient funds in customer’s accountUnauthorized redistribution of purchased itemsMain issue: Secure payment scheme
23Process of E-Commerce Attract customers Interact with customers Advertising, marketingInteract with customersCatalog, negotiationHandle and manage ordersOrder capturePaymentTransactionFulfillment (physical good, service good, digital good)React to customer inquiriesCustomer serviceOrder tracking
24Infrastructure for E-Commerce The Internetsystem of interconnected networks that spans the globerouters, TCP/IP, firewalls, network infrastructure, network protocolsThe World Wide Web (WWW)part of the Internet and allows users to share information with an easy-to-use interfaceWeb browsers, web servers, HTTP, HTMLWeb architectureClient/server modelN-tier architecture; e.g., web servers, application servers, database servers, scalability
25E-commerce Timeline 1970s: Electronic Funds Transfer (EFT) Used by the banking industry to exchange account information over secured networksLate 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce within companiesUsed by businesses to transmit data from one business to another1990: Tim Berners-Lee writes the first web browser,Worldwide Web1994: Pizza Hut offers pizza ordering on its WebsiteFirst online bank opensAttempts were made to offer flower delivery andmagazine subscriptions online.1995: Jeff Bezos launches Amazon.comeBay is founded1998: Electronic postal stamps can be purchased online
26Promise & Threat Impact and Issues of Electronic Commerce The business, societal, and research problematic of E-commerce spans an immense range, which reflects the depth of change being caused by this rapidly expanding mode of doing business.Limitations and Asymmetries of InfrastructureThe infrastructure of the Internet, which acts as the current global information infrastructure, has acknowledged problems.The issues turn on the provision of sufficient band width for the surging use that is also moving to multimedia transmissions, and on the problems fostered by the decentralized nature of the Internet.
29Statistics U.S. e-commerce sales totaled $165.4 billion in 2010 up 14.8% from $144.1 billion 20094.2% of total retail spending took place online during 2010up from 3.9% in 2009Source: U.S. Commerce Department
30Statisticse-commerce accounted for 7.6% of total retail sales during 2010up from 7.0% in 2009Total retail sales, which includes e-commerce sales, increased 7.0% in 2010totaling $3.92 trillionSource: InternetRetailer
31Payment Systems Role of payment Cash properties: wide accept, convenient, anonymity, untraceable, no buyer transaction costOnline credit card payment, Smart CardsSecure protocols: SSL, SETInternet payment systemsElectronic cash, digital walletsMicro-paymentsWireless devices
32How does echeck work? Exactly same way as paper Check writer "writes" the echeck using one of many types of electronic devices”Gives" the echeck to the payee electronically.Payee "deposits" echeck, receives credit,Payee's bank "clears" the echeck to the paying bank.Paying bank validates the echeck and "charges" the check writer's account for the check.