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E-Commerce. E-commerce allows people to exchange goods and services electronically - The buying and selling of goods/services are performed on the Internet.

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Presentation on theme: "E-Commerce. E-commerce allows people to exchange goods and services electronically - The buying and selling of goods/services are performed on the Internet."— Presentation transcript:

1 E-Commerce

2 E-commerce allows people to exchange goods and services electronically - The buying and selling of goods/services are performed on the Internet. No barrier of distance you can buy things in Africa, Asia, America or Europe.

3 Around the world

4 Electronically via internet

5 Electronically You do not need to go to the shop personally.


7 You can do business at day or night anytime. You can shop in summer or winter

8 You can shop anywhere

9 Any Places


11 Any things


13 Any Services Idea Lecture Accounting Advertising Moving Information Technology

14 E-commerce can roughly be divided into four categories E-commerce E-tailing Electronic Data Interchange E-mail / Fax Business to Business

15 E-tailing Online catalogue sales 1 In 1997, Dell Computers reported orders of a million dollars a day.

16 Exchange of business data using an understood data format among business partners Electronic Data Interchange 2

17 EDI 2

18 Companies use E-mail and Fax to send information to customers. Customers use E-mail and Fax to place orders 3

19 E-mail/Fax 3

20 Companies can sell products/services to other companies. It is a quick way to reach the right people in a company for more information 4

21 Business to Business 4

22 How does EDI work?

23 Buyer completes an electronic purchase order 1

24 2 Send order to the vendor electronically

25 3 Purchase order reaches vendor’s mail box via network. Purchase order sits there waiting for vendor to open it Open the purchase order please!

26 4 Vendor sends acknowledgement back to buyer and informs the buyer that the order is received and is being processed

27 5 Acknowledgement in the buyer’s network waiting for the buyer to open it Buyer receives the acknowledgement

28 The Hong Kong government began accepting lodgment of Import/Export Declarations through EDI in April 1997

29 Three Major Steps of E-commerce Great Product Good Web Site Attract Customer

30 Is there another online business with similar products? Can you do it better? Will your product promote well? Is your product going to be fun to sell on Web? Major Steps involving E-commerce 1

31 2 Customer management Order tracking, Subscription Services Real-time credit card processing Inventory control, Security Web site hosting, Web site creation tools Promotion, marketing Detailed reporting functions etc.

32 Major Steps involving E-commerce 3 Affiliate Program Mail Order Online Catalogue Online Shopping

33 Major Steps involving E-commerce Affiliate Program 3a3a In 1997, launched the first affiliate program. It allows owners of other web sites to refer customers to Amazon in exchange for a fee. A good affiliate program must be Easy to join Good product and price

34 Major Steps involving E-commerce 3b3b Mail Order Design a user friendly web site Bring targeted customers to your mail order business You can sell clothes, books, software, hardware, old things, etc.

35 Major Steps involving E-commerce 3c3c There are many things that you can sell through online catalogues: Books Computers Food/Gifts Clothing Music …. Online Catalogue

36 Major Steps involving E-commerce 3d3d Online Shopping Make the online shopping experience a pleasure for your customers such as providing them with music when they are shopping around Getting them back for shopping again

37 E-commerce Essential Elements

38 High Availability Unlimited concurrent connections Modem dial-in and run-time event support Traffic redistribution Issue coupon to returning customers Good shopping cart

39 High Availability 5-1

40 Unlimited concurrent connections 5-2

41 Modem dial-in and run-time event support 5-3

42 Traffic redistribution 5-4

43 Issue coupon to returning customers 5-5

44 Good shopping cart 5-6

45 How does E-commerce work?

46 Consumer visits Web to select products and submit purchase request Consumer is linked to an Internet secure site to exchange address / credit card information Internet secure server hands off to local application server Transaction approved and issue consumer with on-line receipt for printing Consumer returns to merchant’s web for further shopping Steps Summary

47 Consumer visits Web to select products and submit purchase request Internet Merchant Consumer

48 Consumer is linked to a Internet secure site to exchange address / credit card information Internet Secure Server Internet

49 Internet secure server hands off to local application server Internet Secure Server BANK Local Server Merchant

50 Transaction approved and issue consumer with on-line receipt for printing Internet Secure Server

51 Consumer returns to merchant’s web for further shopping Internet

52 Several basic steps involved in becoming E-commerce enabled Getting an Internet Merchant Bank Account Web Hosting Authentication and obtaining Digital Certificate Finding a provider of online transactions Creating /purchasing a shopping cart

53 Getting an Internet Merchant Bank Account In order to accept credit cards over the Internet, you must apply to your bank for an Internet Merchant Bank Account. Talk to your bank for this

54 Web Hosting Good uptime Good technical support Fast connection to the net staff that is knowledgeable about e-commerce compatibility with major e-commerce providers

55 Finding a provider of online transactions How many transactions do you expect to be completing in a month? How many products do you have on your web? How complex is the software? How much do you want to spend ? …...

56 Authentication and obtaining Digital Certificate Authentication is the process to ensure that the organisation is what it claims to be A digital certificate is the electronic equivalent of a business licence

57 Digital Certificate Sample

58 Digital Certificate is issued by a third trusted party. This third party is called Certificate Authority (CA). You may contact major software house, Hong Kong Post or your bank for more information Digital certificates can be kept in registries so that authenticated users can look up. A digital certificate enables SSL (secure socket layer encryption) on the Web server so that information can be transmitted securely and ensure that hackers cannot intercept it. SSL technology is fully supported with all major Web browsers such as Netscape and Internet Explorer


60 Creating /purchasing a shopping cart Shopping cart is an operating system that allows people to purchase your items, keep track of your accounts and many other useful features. You can buy or rent this software from your service provider


62 Consumers Merchants

63 Since payment is done via networking we must make sure it is not intercepted by illegal parties. We do not even have to know the parties which we are dealing with. Security is therefore the first priority in E- commerce

64 Cryptography is the science of information security. Cryptography includes techniques such as micro-dots, merging words with images, and other ways to hide information in storage or transit. Cryptography is most often associated with scrambling plain text into cipher text. This process is called encryption. The process of getting back the original text is known as decryption. There are four objectives of cryptography: 1) Confidentiality 2) Integrity 3) Non-repudiation 4) Authentication

65 1) Confidentiality The information cannot be understood by anyone for whom it was unintended 2) Integrity The information cannot be altered in storage or transit between sender and intended receiver without the alteration being detected 3) Non-repudiation The creator/sender of the information cannot deny at a later stage his or her intentions in the creation or transmission of the information 4) Authentication The sender and receiver can confirm each other’s identity and the origin/destination of the information

66 Private Key Public Key Traditional cryptography usually involves the creation and sharing of a secret key for the encryption and decryption of messages

67 Bob Bob sends his secret key to Alice Alice encrypts message with Bob’s key Alice Scrambled text

68 Internet BOB Alice Scrambled text travels via Internet to Bob

69 Bob Bob encrypts Alice’s Message with his key Internet

70 Let us assume Bob's secret key is a code translation as follows: A  Z, B  Y, C  X, D  W, E  V, F  U, G  T, …. …. X  C, Y  B, Z  A If Alice sends a word message 'ACE' to Bob, she will apply the above code translation to the message. The converted new message will be 'ZXV’ The message 'ZXV' will be travelling on the Internet. If someone intercepts this message all he/she will get is the message 'ZXV'. When Bob gets this message 'ZXV' he will apply the same code translation to it and the original message 'ACE' will appear again. In reality, the code translation is far more complicated than this. Example

71 There are several problems in using this method. First, Bob must find a way to give Alice his secret key. If the key is intercepted, all of Bob's messages are decoded. Second, Bob needs to trust Alice. Once Alice gets Bob's secret key, she may read Bob's other private messages or even pretend that she is Bob. Problem

72 A public key infrastructure consists of: - A certificate authority (CA) that issues and verifies digital certificates. - A certificate includes the public key or information about the public key - A registration authority (RA) that acts as the verifier for the certificate authority before a digital certificate is issued to a requestor - One or more directories where the certificates (with their public keys) are held - A certificate management system

73 How does the Public Key Cryptography work? In public key cryptography, a public and a private key are created simultaneously using the same algorithm issued by a certificate authority (CA). The private key is given only to the requesting party and the public key is made publicly available in a directory that all parties can access. The private key is never shared with anyone or sent across the Internet. You use the private key to decrypt text that has been encrypted with your public key by someone else. Thus, if I send you a message, I can find out your public key (but not your private key) from a central administrator and encrypt a message to you using your public key. When you receive it, you decrypt it with your private key. In addition to encrypting messages (which ensures privacy), you can authenticate yourself to me (so I know that it is really you who sent the message) by using your private key to encrypt a digital certificate. When I receive it, I can use your public key to decrypt it.

74 Bob Bob has 2 keys public Private

75 Alice Alice gets Bob’s public key from the public directory Encrypted text Internet Bob To Bob She applies the key to her document

76 Bob Internet Bob decrypts Alice’s scrambled text with his own private key Scrambled text travels via Internet to Bob

77 There are several advantages in using Public Key Everyone can send messages to Bob using the Public Key and nobody can decrypt it Bob does not need to worry Alice can intercept messages sent to Bob, nor can she imitate him. Bob can sign message because Bob is the only person with his private key. If he encrypts a message with his private key, it is equivalent to using a Digital Signature.

78 Digital Signature Bob has a private key. If he sends a message with this key, it is equivalent to have him signed

79 Word of mouth is very powerful on the Net; tell all of your friends about your page. Put your URL in the signature file of your email and the header of all business correspondence Submit your site to as many search engines as possible. Try finding Web-sites with similar themes and make deals to create reciprocal links. Create an advertising banner and purchase space from a popular Web-site to display it.

80 Avoid spamming Investigate the Web sites that are possible rivals and formulate a strategy for competing against them. If you anticipate a lot of growth in the amount of orders coming through your site, figure out how you are going to cope with the increased load before you get swamped. Remember that you can ask for further advice from the company that you decide to employ.

81 Answer only the minimum questions when filling out forms. Never give out your Hong Kong ID Card number. Always pay with a credit card. Get the bad guys on the latest Internet report. Consider shopping with companies that you already know. Be careful, if someone asks you to reveal your passwords or any information to install your online service. Make sure you feel comfortable with a company before doing business with it. Pay attention to the address of the merchant's site (URL). This will ensure that you are dealing with the correct company. If it sounds too good to be true, it probably is. Always know the company/party that you are dealing with.

82 Print a copy of your order and confirmation number for your records. Use a secure browser. It will encrypt or scramble purchase information. Therefore, the information will not be intercepted. Determine what the shipping times will be to ensure your purchases will arrive in time. Look for the company's physical location, including the address and phone number. Some Internet sites ask you to create an account with a password. To protect yourself, never use the same password you use for other accounts or sites. Determine the company's refund and return policies.

83 E-business E-business means building business around digital technology and using Internet as the main communication medium. E-commerce means trading via the Internet. One should never confuse e-business with e-commerce. In order to have a good start in your e-business, your business planning should follow the following suggestions as closely as possible:

84 1.DO NOT completely redesign your business in order to become an e-business. The key to success is to use mix management. The traditional business and e-business models should co-exist and be tailored to fit the targeting market. 2.DO NOT suspend any good project management rules simply because this is e-business. People always overestimate the potential benefits and underestimate the time needed to realise the profit from e-business.

85 3.DO NOT believe the myth that e-business can do everything for you. It must be recognised that technology is only meant to serve the business need. If it was misapplied it could drain up your company resources. You must ensure that each e-business initiative has a sound business goal. You should select technologies according to their fitness for the intended job. You should not select the technologies simply because they are new in the market.

86 4.DO NOT develop e-business plan simply work against your existing competitors. This would run into substantial risk of being overtaken. You should develop a comprehensive e-business survival plan that anticipates the actions of your top competitors and embraces the radical changes necessary to beat them. 5.DO NOT focus solely on today's customers, otherwise you will miss the opportunity to explore your future potential customers tomorrow. Business plans need to be aligned to address the threat of cyber-competition and explore new sources of revenue

87 Future of E-commerce The growth in the number of transactions carried out between organisations, or organisations and individuals, by means of an electronic network is projected to grow by 400 per cent over the next two years. In fact, the marketplace is expected to expand 92% each year for the foreseeable future. In 2000, e-business transactions are predicted to exceed US$3 trillion. It will reach 500 million users by 2003. Both customers and merchants worry about security. Merchants hope to cut the online fraud into minimum while the customers are concerned about their privacy. Customers have no control over how their personal information will be used.

88 The need for Web standards will reduce system complexity and increase security. At present, the US web sites support 128 bits encryption and their users have browsers capable of exploiting this higher level of security. The rest of the world is restricted to support for 40 bits encryption, with some having none at all. Security only addresses individual country issues and does not increase security world wide.

89 Networks are expensive to develop and maintain. They are inflexible and incompatible. They are developed to satisfy the specific needs of particular organisations and not the broader needs of a global marketplace. We are looking for greater convenience such as one one-click solution. Buyers and sellers can communicate using standard web technologies. Banks, credit card issuers and card processors should be able to use standard private networks. However, there is no current industry standard for buyers and sellers to pass instructions directly over the Internet to their financial service providers.

90 The future of e-commerce should integrate banks, credit card issuers, buyers and sellers in a way that is automated, secure and inexpensive, but dynamic, using standard Internet protocols and operating system in real time.


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