E-Commerce

E-Commerce or Electronics Commerce is a methodology of modern

business, which addresses the requirements of business organizations. It
can be broadly defined as the process of buying or selling of goods or
services using an electronic medium such as the Internet.
E-Commerce or Electronics Commerce is a methodology of modern
business, which addresses the need of business organizations, vendors
and customers to reduce cost and improve the quality of goods and
services while increasing the speed of delivery. Ecommerce refers to the
paperless exchange of business information using the following ways −

 Electronic Data Interchange (EDI)

 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
 Other Network-based technologies

Features
E-Commerce provides the following features −
 Non-Cash Payment − E-Commerce enables the use of credit cards,
debit cards, smart cards, electronic fund transfer via bank's website,
and other modes of electronics payment.
  24x7 Service availability − E-commerce automates the business of
enterprises and the way they provide services to their customers. It
is available anytime, anywhere.
 Advertising / Marketing − E-commerce increases the reach of
advertising of products and services of businesses. It helps in better
marketing management of products/services.
 Improved Sales − Using e-commerce, orders for the products can
be generated anytime, anywhere without any human intervention. It
gives a big boost to existing sales volumes.
 Support − E-commerce provides various ways to provide pre-sales
and post-sales assistance to provide better services to customers.
 Inventory Management − E-commerce automates inventory
management. Reports get generated instantly when required.
Product inventory management becomes very efficient and easy to
maintain.
 Communication improvement − E-commerce provides ways for
faster, efficient, reliable communication with customers and partners.
SEVEN UNIQUE FEATURES OF E-COMMERCE
1. Ubiquity - E-commerce technology is available everywhere. A unique
feature of e-commerce technology. Example is if the user is at outstation,
he also can through www.acer.com get the information of the product.
2. Global Reach - The total number of users or customers an e-commerce
business can obtain. Example is www.acer.com is whole world also can
browse it. Because the website have supplied many language to let
different language users understand it.
3. Universal Standards - Standards that are shared by all nations around
the world. Example is when you see the price of product in the website, that
price is very fairly and standards.
4. Richness - Video, audio and text messages are possible. Example is
the richness is can make the websites become attract people to browse.
5. Interactivity - Technology that allows for two way communication
between merchant and consumer. Example is in the website we can
contract the merchants, that have many way can contract like: phone, e-
mail, video call, and etc.
6. Information Density - The total amount and quality of information
available to all market participants. Example is we can get the clearly
information in the websites.
7. Personalization/Customization - It allows personalized messages to
be delivered to individuals. Example of personalization is if have a new
product, the website will send the email flyer to the customer. Example of
customization is customer can customize something in the product like
name, pattern, colors, and etc.

E-Commerce advantages
E-Commerce advantages can be broadly classified in three major
categories −

 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society

Advantages to Organizations
 Using e-commerce, organizations can expand their market to
national and international markets with minimum capital investment.
An organization can easily locate more customers, best suppliers,
and suitable business partners across the globe.
 E-commerce helps organizations to reduce the cost to create
process, distribute, retrieve and manage the paper based
information by digitizing the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organization to provide better customer services.
 E-commerce helps to simplify the business processes and makes
them faster and efficient.
 E-commerce reduces the paper work.
  E-commerce increases the productivity of organizations. It supports
"pull" type supply management. In "pull" type supply management, a
business process starts when a request comes from a customer and
it uses just-in-time manufacturing way.

Advantages to Customers
 It provides 24x7 support. Customers can enquire about a product or
service and place orders anytime, anywhere from any location.
 E-commerce application provides users with more options and
quicker delivery of products.
 E-commerce application provides users with more options to
compare and select the cheaper and better options.
 A customer can put review comments about a product and can see
what others are buying, or see the review comments of other
customers before making a final purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see the
relevant detailed information within seconds, rather than waiting for
days or weeks.
 E-Commerce increases the competition among organizations and as
a result, organizations provides substantial discounts to customers.

Advantages to Society
 Customers need not travel to shop a product, thus less traffic on road
and low air pollution.
 E-commerce helps in reducing the cost of products, so less affluent
people can also afford the products.
 E-commerce has enabled rural areas to access services and
products, which are otherwise not available to them.
 E-commerce helps the government to deliver public services such as
healthcare, education, social services at a reduced cost and in an
improved manner.
Disadvantages of e-commerce
The disadvantages of e-commerce can be broadly classified into two
major categories −

 Technical disadvantages
 Non-Technical disadvantages

Technical Disadvantages
 There can be lack of system security, reliability or standards owing to
poor implementation of e-commerce.
 The software development industry is still evolving and keeps
changing rapidly.
 In many countries, network bandwidth might cause an issue.
 Special types of web servers or other software might be required by
the vendor, setting the e-commerce environment apart from network
servers.
 Sometimes, it becomes difficult to integrate an e-commerce software
or website with existing applications or databases.
 There could be software/hardware compatibility issues, as some e-
commerce software may be incompatible with some operating
system or any other component.

Non-Technical Disadvantages
 Initial cost −The cost of creating/building an e-commerce application
in-house may be very high. There could be delays in launching an e-
Commerce application due to mistakes, and lack of experience.
 User resistance − Users may not trust the site being an unknown
faceless seller. Such mistrust makes it difficult to convince traditional
users to switch from physical stores to online/virtual stores.
 Security/ Privacy − It is difficult to ensure the security or privacy on
online transactions.
 Lack of touch or feel of products during online shopping is a
drawback.
 E-commerce applications are still evolving and changing rapidly.
  Internet access is still not cheaper and is inconvenient to use for
many potential customers, for example, those living in remote
villages.

Difference between Traditional Commerce and E-commerce

1. Traditional Commerce: 
Traditional commerce refers to the commercial transactions or
exchange of information, buying or selling product/services from
person to person without use of internet which is an older method of
business style and comes under traditional business. Now a days
people are not preferring this as it is time taking and needs physical
way of doing business. 
Example includes physical market/bazaar. 

2. E-commerce : 
E-commerce refers to the commercial transactions or exchange of
information, buying or selling product/services electronically with the
help of internet which is a newer concept of business style and
comes under e-business. Now a days people are preferring this as it
is less time taking and does not need physical way of doing business
everything can be done with laptop or smartphone and internet. 
Example includes online shopping sites. 
 
Difference between Traditional Commerce and E-commerce: 
 
S.No. TRADITIONAL COMMERCE E-COMMERCE
01. Traditional commerce refers to the E-commerce refers to the
commercial transactions or commercial transactions or
exchange of information, buying exchange of information, buying
or selling product/services from or selling product/services
person to person without use of electronically with the help of
internet. internet.
02. In traditional commerce it is In e-commerce it is easy to
difficult to establish and maintain establish and maintain standard
standard practices. practices.
03. In traditional commerce direct In e-commerce indirect
interaction through seller and interaction through seller and
buyer is present. buyer occurs using electronic
medium and internet.
04. Traditional commerce is carried E-commerce is carried out by
out by face to face, telephone internet or other network
lines or mail systems. communication technology.
05. In traditional commerce In e-commerce processing of
processing of transaction is transaction is automatic.
manual.
06. In traditional commerce delivery In e-commerce delivery of goods
of goods is instant. takes time.
07. Its accessibility is for limited time Its accessibility is 24×7×365
in a day. means round the clock.
08. Traditional commerce is done E-commerce is used to save
where digital network is not valuable time and money.
reachable.
09. Traditional commerce is a older E-commerce is a newer concept
method of business style which of business style which comes
comes under traditional business. under e-business.
10. Its resource focuses on supply Its resource focuses on demand
side. side.
11. In traditional commerce In e-commerce customers can
customers can inspect products not inspect products physically
physically before purchase. before purchase.
12. Its business scope of business is a
Its business scope is worldwide
limited physical area. as it is done through digital
medium.
13. For customer support, information For customer support,
exchange there is no such uniform information exchange there is
platform. exists uniform platform.
1 Heavy dependency on information Information sharing is made
exchange from person to person. easy via electronic
communication channels making
little dependency on person to
 person information exchange.
2 Communication/ transaction are Communication or transaction
done in synchronous way. Manual can be done in asynchronous
intervention is required for each way. Electronics system
communication or transaction. automatically handles when to
pass communication to required
person or do the transactions.
3 It is difficult to establish and A uniform strategy can be easily
maintain standard practices in established and maintain in e-
traditional commerce. commerce.
4 Communications of business In e-Commerce or Electronic
depends upon individual skills. Market, there is no human
intervention.
5 Unavailability of a uniform E-Commerce website provides
platform as traditional commerce user a platform where al l
depends heavily on personal information is available at one
communication. place.
6 No uniform platform for E-Commerce provides a
information sharing as it depends universal platform to support
heavily on personal commercial / business activities
communication. across the globe.

Types of E-Commerce

Every Internet business is either pure-play or brick-and-click. A pure-play

business, such as Amazon and Zappos, has an online presence only and
uses the capabilities of the Internet to create a new business. Brick-and-
click businesses, such as Barnes and Noble and Vermont Country Store,
combine a physical presence with an online presence. These businesses
use the Internet to supplement their existing businesses.

There are several different types of e-commerce. A common classification

system is with respect to the nature of transactions or the relationships
among participants
Types of E-commerce model:
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)
 Government - to - Business (G2B)
 Government - to - Citizen (G2C)
 Other models
Business - to - Business (B2B)
When a good or service is sold by a business to another business, e.g., a
software-as-a-service is sold by a business for other businesses to use.
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 (B2C)

When a good or service is sold to an individual consumer by a business,
e.g., we buy a pair of shoes from an online retailer.
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 (C2C)

When a good or service is sold by a consumer to another consumer, e.g.,
we sell our old furniture on eBay to another 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 (C2B)
When a consumer’s own products or services is sold to a business or
organization.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/Administration (B2A)or (B2G)

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.

Business-to-administration (B2A), also known as business-to-government

(B2G), refers to all transactions between companies and public
administrations or government agencies. Government agencies use
central websites to trade and exchange information with various business
organizations. This is an area that involves many services, particularly in
areas such as social security, employment, and legal documents.[2]
Businesses that are accustomed to interacting with other businesses or
directly with consumers often encounter unexpected hurdles when working
with government agencies. Layers of regulation can harm the overall
efficiency of the contracting process, and thus, governments tend to take
more time than private companies to approve and begin work on a given
project.
While businesses may find that government contracts involve additional
paperwork, time, and vetting, there are advantages to providing goods and
services to the public sector. Government contracts are often large and
more stable than analogous private-sector work. A company with a history
of successful government contracting usually finds it easier to get the next
contract.
One example of a B2A model is Accela, a software company that provides
government software solutions and public access to government services
for permitting, planning, licensing, public health, and so on.
Government - to – Business(G2B)
Governments use B2G model websites to approach business
organizations. Such websites support auctions, tenders, and application
submission functionalities.

This model enables online dealings between companies and public

administration, i.e. the Government by enabling the exchange of
information through central websites. It provides businesses with a
platform to bid on government opportunities such as auctions, tenders,
application submission, etc. The scope of this model is now enhanced,
thanks to the investments made towards e-government.
Government - to - Citizen
Governments use G2C model websites to approach citizen in general.
Such websites support auctions of vehicles, machinery, or any other
material. Such website also provides services like registration for birth,
marriage or death certificates. The main objective of G2C websites is to
reduce the average time for fulfilling citizen’s requests for various
government services.

Consumer-to-Administration (C2A)
 C2A e-commerce encompasses all electronic transactions between
individuals and public administration. The C2A e-commerce model helps
the consumer post their queries and request information regarding the
public sector directly from their local governments/authorities. It provides an
easy way to establish communication between the consumers and the
government.
Examples of C2A include taxes (filing tax returns), health (scheduling an
appointment using an online service), and paying tuition for higher
education.
The C2A platform is meant for consumers, who may use it for requesting
information or posting feedbacks concerning public sectors directly to the
government authorities/administration. Its areas of applicability include:

 The dissemination of information.

 Distance learning.
 Remittance of statutory payments.
 Filing of tax returns.
 Seeking appointments, information about illnesses, payment of health
services, etc.

Other models:

Mobile commerce (m-commerce): Mobile commerce (m-

commerce) refers to the purchase of goods and services through wireless
technology, such as cell phones, and handheld devices, such as
Blackberries and iPhones. Japan has the lead in m-commerce, but it is
expected to grow rapidly in the United States over the next several years.
eMarketer predicts mobile content revenues will grow to more than 20
percent for the period 2009–2014, with the fastest growth coming from
mobile

Peer-to-peer (P2P) : Peer-to-peer (P2P) technology makes it possible for

Internet users to share files and computer resources directly without having
to go through a central web server. P2P began with Napster offering free
music downloads via a file-sharing system.Free Encyclopedia of
Ecommerce, “Peer-to-Peer Technology (P(2P),” accessed June 1,
2012, http://ecommerce.hostip.info/pages/840/Peer-Peer-Technology-
P2P.html.Tamago launched the world’s first P2P commerce system in
2005, which allowed people to sell every type of digital media directly from
their computers to customers all over the world. People who publish videos,
photos, music, e-books, and so forth can earn royalties, while buyers earn
commissions for distributing media to others.

Why E-Commerce?
Here are a few important benefits, among a host of others, of this
revolutionary model of business:

 E-commerce bridges the gap between local sellers and global

audiences, thereby helping them in widening their reach across the
global market segment without making further investments.
 The consumers are provided with a gamut of options for
procurements.
 It facilitates the round-the-clock conduct of trade.