MIS 565 – What is Ecommerce Instructor: Ali Hashmi

Use of Internet and Web to transact business More formally: What is E-commerce? Use of Internet and Web to transact business More formally: Digitally enabled commercial transactions between and among organizations and individuals (B2C and B2B)

E-commerce vs. E-business A broader definition of Electronic Commerce that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organization

Difference between ecommerce and ebusiness

Evolution of Web

Unique Features of E-commerce Technology Is ubiquitous (available everywhere, all the time) Offers global reach (across cultural/national boundaries) Operates according to universal standards (lowers market entry for merchants and search costs for consumers) Provides information richness (more powerful selling environment) Is interactive (can simulate face-to-face experience, but on global scale) Increases information density (amount and quality of information available to all market participants) Permits personalization/customization Social technology

Revenue Model Describes how the firm will earn revenue, generate profits, and produce a superior return on invested capital Major types: Advertising revenue model e.g. Banner Ads, pay per click Subscription revenue model e.g. hosting services, ASPs, etc Transaction fee revenue model e.g. paypal, expedia, etrade, etc Sales revenue model e.g. amazon, ebay, etc Slide 2-7

Classified by market relationship Types of E-commerce Classified by market relationship Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Classified by technology used Peer-to-Peer (P2P) Mobile commerce (M-commerce)

B2C Involves online businesses attempting to reach individual consumers Many types of business models within this category including online retailers, content providers, portals, transaction brokers, service providers, market creators and community providers E.g. BarnesandNoble.com, 1800Flowers.com, Godiva.com, REI.com

The Growth of B2C E-commerce SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b; authors’ estimates.

B2B Involves businesses focusing on selling to other businesses Two primary business models within B2B: Net marketplaces (includes e-distributors, e-procurement companies, exchanges and industry consortia) Private industrial networks (includes single firm networks and industry-wide networks) E.g.Direct email marketing company(mail chimp), online CRM application (salesforce.com), grainger.com, techdata.com, alibaba.com, etc

The Growth of B2B E-commerce Figure 1.5, Page 28 SOURCES: U.S. Census Bureau, 2009a; authors’ estimates.

C2C Provides a way for consumers to sell to each other, with the help of an online market maker eBay, half.com, craigslist, etc

P2P Uses peer-to-peer technology, which enables Internet users to share files and computer resources without having to go through a central Web server E.g: Torrents, limewire, etc

M-commerce Use of wireless digital devices such as cell phones and handheld devices to enable transactions on the Web E.g Mobile banking, Mobile ticketing, etc