DAV SCHOOL OF BUSINESS MANAGEMENT, BBSR

SUBJECT : E-Business
BBA 6th semester

Unit-1

Syllabus: Introduction to E-Commerce and Physical Commerce (Traditional

business). Different types of E-Commerce, E-commerce Advantages &
Disadvantages of E-Commerce.

Important questions
Q1. What is E-Commerce? Briefly explain different types of E-Commerce.
Q2. What is E-Commerce? Explain its nature and scope.
Q3. Differentiate Traditional Commerce and E-Commerce.
Q4. What is E- Commerce? Explains Advantages of E-Commerce.
Q5. What is E- Commerce? Explains Limitations of E-Commerce.

What is E-Commerce? Briefly explain different types of E-Commerce.

E-Commerce
➢ Electronic commerce or Ecommerce is a term for any type of business, or
commercial transaction that involves the transfer of information across the
Internet.
➢ It covers a range of different types of businesses.
➢ Ecommerce allows consumers to electronically exchange goods and
services with no barriers of time or distance.
Different types of E-Commerce
E-commerce business models can generally be categorized into the following
categories.

• Business - to - Business (B2B)

 • Business - to - Consumer (B2C)
• Consumer - to - Consumer (C2C)
• Consumer - to - Business (C2B)
• Business - to - Government (B2G)
Business - to - Business
A website following the B2B business model sells its products to an intermediate
buyer who then sells the product to the final customer.
As an example, a wholesaler places an order from a company's website and after
receiving the consignment, sells the end product to the final customer who comes
to buy the product at one of its retail outlets.

Business - to - Consumer
A website following the B2C business model sells its products directly to a
customer. A customer can view the products shown on the website. The customer
can choose a product and order the same. The website will then send a notification
to the business organization via email and the organization will dispatch the
product/goods to the customer.
Consumer - to - Consumer
A website following the C2C business model helps consumers to sell their assets
like residential property, cars, motorcycles, etc., or rent a room by publishing their
information on the website. Website may or may not charge the consumer for its
services. Another consumer may opt to buy the product of the first customer by
viewing the post/advertisement on the website.

Consumer - to - Business
In this model, a consumer approaches a website showing multiple business
organizations for a particular service. The consumer places an estimate of amount
he/she wants to spend for a particular service. For example, the comparison of
interest rates of personal loan/car loan provided by various banks via websites. A
business organization who fulfills the consumer's requirement within the specified
budget, approaches the customer and provides its services.
Business - to - Government
B2G model is a variant of B2B model. Such websites are used by governments to
trade and exchange information with various business organizations. Such
websites are accredited by the government and provide a medium to businesses to
submit application forms to the government.

Differentiate Traditional Commerce and E-Commerce.

Difference between Traditional Commerce and E-Commerce.

BASIS FOR
TRADITIONAL COMMERCE E-COMMERCE
COMPARISON

Meaning Traditional commerce is a branch of e-Commerce means

business which focuses on the carrying out commercial
exchange of products and services, transactions or exchange
and includes all those activities of information,
which encourages exchange, in electronically on the
some way or the other. internet.
BASIS FOR
TRADITIONAL COMMERCE E-COMMERCE
COMPARISON

Processing of Manual Automatic

Transactions

Accessibility Limited Time 24×7×365

Physical Goods can be inspected physically Goods cannot be

inspection before purchase. inspected physically
before purchase.

Customer Face-to-face Screen-to-face

interaction

Scope of Limited to particular area. Worldwide reach

business

Information No uniform platform for exchange Provides a uniform

exchange of information. platform for information
exchange.

Resource focus Supply side Demand side

Business Linear End-to-end

Relationship

Marketing One-way marketing One-to-one marketing

Payment Cash, cheque, credit card, etc. Credit card, fund transfer
etc.

Delivery of Instantly Takes time

goods
What is E- Commerce? Explains Advantages of E-Commerce.
Definition of e- Commerce
Advantages of E-Commerce
I. Benefits to Organizations: The benefits to organizations are as follows:
1.Expansion of market: Electronic commerce expands the market local to
national and international market with minimal capital outlay, a company can
easily and quickly locate more customers, the best suppliers, and the most suitable
business partners worldwide.
2.Cost reduction: Electronic commerce decreases the cost of creating, processing,
distributing, storing, and retrieving paper based information.
3.Ability for creating specialized businesses: E commerce has a ability to create
highly specialized business through its process .for example, dog toys which can
be purchased only in pet shops or department and discounts stores in the physical
world are sold now in a specialized www.dogtoys.com
4.Reduction in inventory: Electronic commerce allows reduced inventories and
overhead by facilitating “pull” type supply chain management.
5.Create competitive advantages: The pull-type processing enables expensive
customization of products and services which provides competitive advantage to
its implementers.

6.Time reduction: Electronic commerce reduces the time between the outlay of
capital and the receipt of products and services.

II. Benefits to Consumer's:

The benefits of E-Commerce to consumers are discussed as follows:
1.Any time transaction: Electronic commerce enables customers to shop or do
other transactions 24 hours a day, all year round, from almost any location.
2.More choice: Electronic commerce provides customer with more choices; they
can select from many vendors and from many more products.
 3. Frequently provide less expensive product and services: Electronic
commerce frequently provides customers with less expensive products and services
by allowing them to shop in many places and conduct quick comparisons.
4. Quick delivery: In some cases, especially with digitized products, E-
Commerce allows quick delivery.
5. Quick information: Customers can receive relevant and detailed information
in seconds, rather than days or weeks.
6. Participation possible in virtual auction: Electronic commerce makes it
possible to participate in virtual auctions.
III. Benefits to Society: The benefits of E—Commerce to society are discussed as
follows:
1.Encourage work to home: Electronic commerce enables more individuals to
work at home and to do less traveling for shopping, resulting in less traffic on the
roads and lower air pollution.
2.Way to increase the standard of living: Electronic commerce allows some
merchandise to be sold at lowest prices, so less affluent people can buy more and
increase their standard of living.
3.High tech and advanced product available to third world countries and
rural area people: Electronic commerce enables people in third world countries
and rural areas to enjoy products and services that otherwise are not available to
them.

4.Facilitates delivery of public services: Electronic commerce facilitates delivery

of public services, such as health care, education, and distribution of government
social services at a reduced-cost and/or improved quality.

What is E- Commerce? Explains Limitations of E-Commerce.

Definition of e- Commerce
Disadvantages/Limitation of E-Commerce
The limitations of E—Commerce can be grouped into two categories which are:
I. Technical Limitations of E-COMMERCE: The technical limitations of E-
Commerce are discussed as follows:

• Lack of system security: The first and foremost important technical

limitation is a lack of system, security, reliability, standards and
communication protocols. Due to this limitation many people do not
participate in e commerce.

• Insufficient telecommunication bandwidth: Insufficient tele-

communication bandwidth is another limitation of e commerce. Due to
this problem the user faces always website crash and loading problem.
This enables the users to complete the process.

• Rapid up graduation of software: The software e development tools

are still evolving and changing rapidly. This is another limitation which
hampers the growth of e commerce in developing nation like India.

• Problem of integration of internet and e commerce software: It is

difficult to integrate the Internet and E—Commerce software with some
existing applications and databases for example the data base in word
format is not useful in bulk emailing or sms by the companies.

• Infrastructural limitation: infrastructural facility is a major issue in

the business operation on e commerce platform. In the third world
countries and rural entrepreneur faces these types of problem heavily.
For example vendors may need special Web servers and other
infrastructures in addition to the network servers.

II Non-technical Limitations: Apart of the above mention technical limitation e

commerce platform faces many non-technical limitations also.
• Lack of Awareness: The biggest challenge before successful e-
commerce is lack of awareness with the emerging information
technology.

• Lack of Infrastructure: E-commerce infrastructure development is at

its infancy stage in developing countries like India. The lack of
 adequate infrastructural facility is hampering the investment in e-
commerce business in India.
• Lack of Confidence: The people in India still show hesitancy in buying
through the e commerce platform. Lack of quality products, timely
delivery of products as some of them tend to go out of stock, lack of
solutions security are the potential reasons for not developing e-
commerce.

• Skeptic Attitude: Though the Internet is continuing to grow at a rapid

rate, along with e- commerce transactions, the shoppers are still
doubtful about safety and have not been quick to trust sending personal
information such as credit card numbers or address over the internet.

• Credit Cards Frauds: In India, distribution channels are just one part
of the problem related to e-payments. The bigger problem is that of
security.