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Electronic Commerce

The document discusses electronic commerce (e-commerce), including how it involves buying and selling online and how it has grown with internet usage. It also discusses different types of e-commerce transactions and distribution channels for e-commerce businesses.

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Varinder Kaur
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65 views4 pages

Electronic Commerce

The document discusses electronic commerce (e-commerce), including how it involves buying and selling online and how it has grown with internet usage. It also discusses different types of e-commerce transactions and distribution channels for e-commerce businesses.

Uploaded by

Varinder Kaur
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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E-COMMERCE

Electronic commerce, commonly known as e-commerce or eCommerce,


consists of the buying and selling of products or services over electronic
systems such as the Internet and other computer networks. The amount of trade
conducted electronically has grown extraordinarily with widespread Internet
usage. The use of commerce is conducted in this way, spurring and drawing on
innovations in electronic funds transfer, supply chain management, Internet
marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data
collection systems. Modern electronic commerce typically uses the World Wide
Web at least at some point in the transaction's lifecycle, although it can
encompass a wider range of technologies such as e-mail, mobile devices and
telephones as well.
A large percentage of electronic commerce is conducted entirely electronically
for virtual items such as access to premium content on a website, but most
electronic commerce involves the transportation of physical items in some way.
Online retailers are sometimes known as e-tailers and online retail is sometimes
known as e-tail. Almost all big retailers have electronic commerce presence on
the World Wide Web.
Electronic commerce that is conducted between businesses is referred to
as business-to-business or B2B. B2B can be open to all interested parties
(e.g.commodity exchange) or limited to specific, pre-qualified participants
(private electronic market). Electronic commerce that is conducted between
businesses and consumers, on the other hand, is referred to as business-to-
consumer or B2C. This is the type of electronic commerce conducted by
companies such asAmazon.com. Online shopping is a form of electronic
commerce where the buyer is directly online to the seller's computer usually via
the internet. There is no intermediary service. The sale and purchase transaction
is completed electronically and interactively in real-time such as Amazon.com
for new books. If an intermediary is present, then the sale and purchase
transaction is called electronic commerce such as eBay.com.
Electronic commerce is generally considered to be the sales aspect of e-
business. It also consists of the exchange of data to facilitate the financing and
payment aspects of the business transactions.
BUSINESS APPLICATIONS

Some common applications related to electronic commerce are the following:

 Document automation in supply chain and logistics


 Domestic and international payment systems
 Email
 Enterprise content management
 Group buying
 Automated online assistants
 Instant messaging
 Newsgroups
 Online shopping and order tracking
 Online banking
 Online office suites
 Shopping cart software
 Teleconferencing
 Electronic tickets

FORMS

Contemporary electronic commerce involves everything from ordering "digital"


content for immediate online consumption, to ordering conventional goods and
services, to "meta" services to facilitate other types of electronic commerce.
On the consumer level, electronic commerce is mostly conducted on the World
Wide Web. An individual can go online to purchase anything from books or
groceries, to expensive items like real estate. Another example would be online
banking, i.e. online bill payments, buying stocks, transferring funds from one
account to another, and initiating wire payment to another country. All of these
activities can be done with a few strokes of the keyboard.
On the institutional level, big corporations and financial institutions use the
internet to exchange financial data to facilitate domestic and international
business. Data integrity and security are very hot and pressing issues for
electronic commerce.
GLOBAL TRENDS IN E-RETAILING AND SHOPPING

Business models across the world also continue to change drastically with the
advent of eCommerce and this change is not just restricted to USA. Other
countries are also contributing to the growth of eCommerce. For example, the
United Kingdom has the biggest e-commerce market in the world when
measured by the amount spent per capita, even higher than the USA. The
internet economy in UK is likely to grow by 10% between 2010 to 2015. This
has led to changing dynamics for the advertising industry.
Amongst emerging economies, China's eCommerce presence continues to
expand. With 384 million internet users,China's online shopping sales rose to
$36.6 billion in 2009 and one of the reasons behind the huge growth has been
the improved trust level for shoppers. The Chinese retailers have been able to
help consumers feel more comfortable shopping online.

IMPACT ON MARKETS AND RETAILERS


Economists have theorized that e-commerce ought to lead to intensified
price competition, as it increases consumers' ability to gather information about
products and prices. Research by four economists at the University of Chicago
has found that the growth of online shopping has also affected industry structure
in two areas that have seen significant growth in e-
commerce, bookshops andtravel agencies. Generally, larger firms have grown at
the expense of smaller ones, as they are able to use economies of scale and offer
lower prices. The lone exception to this pattern has been the very smallest
category of bookseller, shops with between one and four employees, which
appear to have withstood the trend.

E-COMMERCE TYPES

E-commerce types represent a range of various schemas of transactions which


are distinguished according to their participants.

 Business-to-Business (B2B)
 Business-to-Consumer (B2C)
 Business-to-Employee (B2E)
 Business-to-Government (B2G) (also known as Business to
Administration or B2A)
 Business-to-Machines (B2M)
 Business-to-Manager (B2M)
 Consumer-to-Business (C2B)
 Consumer-to-Consumer (С2C)
 Citizen (Consumer)-to-Government (C2G) (also known as Consumer-to-
Administration or C2A)
 Government-to-Business (G2B)
 Government-to-Citizen (G2C)
 Government-to-Employee (G2E)
 Government-to-Government (G2G)
 Manager-to-Consumer (M2C)
 Peer-to-Peer (P2P)

DISTRIBUTION CHANNELS

E-commerce has grown in importance as companies have adopted Pure-Click


and Brick and Click channel systems. We can distinguish between pure-click
and brick and click channel system adopted by companies.

 Pure-Click companies are those that have launched a website without any
previous existence as a firm. It is imperative that such companies must set up
and operate their e-commerce websites very carefully. Customer service is of
paramount importance. Ex: AMAZON.com
 Brick and Click companies are those existing companies that have added
an online site for e-commerce. Initially, Brick and Click companies were
skeptical whether or not to add an online e-commerce channel for fear that
selling their products might produce channel conflict with their off-line
retailers, agents, or their own stores. However, they eventually added
internet to their distribution channel portfolio after seeing how much
business their online competitors were generating. Ex: futurebazaar.com

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