Chapter 1

Overview of E-commerce

Course name: E-commerce

Chapter 1
Overview of E-commerce
Lecturer: Nguyen The Dai Nghia
Email: nghiantd@uel.edu.vn
Phone/Zalo: 0936385487
 Chapter 1
Overview of E-commerce

Learning Objectives
1.1 Understand why it is important to study e-commerce.
1.2 Define e-commerce, understand how e-commerce differs from e-
business, identify the primary technological building blocks underlying
e-commerce, and recognize major current themes in e-commerce.
1.3 Identify and describe the unique features of e-commerce
technology and discuss their business significance.
1.4 Describe the major types of e-commerce.
1.5 Understand the evolution of e-commerce from its early years to
today.
1.6 Describe the major themes underlying the study of e-commerce

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 Chapter 1
Overview of E-commerce

Everything On Demand: The “Uberization” of E-

commerce
• Class Discussion
– Have you used Grab or any other on-demand service
companies?
– What is the appeal of these companies for users and
providers?
– Are there any negative consequences to the increased
use of on-demand services like Grab and Airbnb?

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 Chapter 1
Overview of E-commerce

The First Five Minutes: Why You Should Study E-

commerce
• First quarter-century or so of e-commerce
– Still just the beginning
– Rapid growth and change
• Technologies evolve at exponential rates
– Disruptive business change
– New opportunities
• Why study e-commerce
– Understand opportunities and risks
– Analyze e-commerce ideas, models, issues
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 Chapter 1
Overview of E-commerce

What Is E-commerce?
• Use of Internet to transact business
– Includes Web, mobile browsers and apps
• More formally:
– Digitally enabled commercial transactions between and among
organizations and individuals

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 Chapter 1
Overview of E-commerce

The Difference Between E-commerce and E-business

• E-business
– Digital enabling of transactions and processes within a firm, involving
information systems under firm’s control
– Does not include commercial transactions involving an exchange of
value across organizational boundaries

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 Chapter 1
Overview of E-commerce

Figure 1.1 The Difference Between

E-commerce and E-business

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 Chapter 1
Overview of E-commerce

The difference between

E-commerce & Traditional commerce
Point of distinction E-commerce Traditional commerce

Interaction Indirect interaction between Direct interaction

buyer and seller through the between buyer and seller
Internet
Suitability For low-value products, Products needed to
intangible, digital products convince customers,
high-value products
Transaction processing Automatically Manually
Scope Across the global Restricted to a definite
area
Accessibility Any time Limited
Cost effectiveness Less expensive More expensive
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 Chapter 1
Overview of E-commerce

Technological Building Blocks Underlying E-

commerce

• The Internet
– Worldwide network of computer networks built on common standards
• The World Wide Web
– Provides access to trillions of web pages created in HTML
– “Surface” Web versus “deep” Web
• Mobile platform
– Smartphones, tablets, ultra-lightweight laptops
– Mobile apps

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 Chapter 1
Overview of E-commerce

Major Trends in E-commerce (1 of 3)

• Business trends include:
– Retail e-commerce and m-commerce settle back to normal growth rates
(around 10%) after Covid-19 pandemic
– Mobile app ecosystem: almost 250 million U.S. adults use smartphone
apps
– Social e-commerce estimated to generate around $55 billion in 2022
– B2B e-commerce revenues expected to reach about $8.5 trillion in
2022

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 Chapter 1
Overview of E-commerce

Major Trends in E-commerce (2 of 3)

• Technology trends include:
– Mobile platform
– Cloud computing
– Internet of Things
– Big data
– Artificial intelligence technologies
– Blockchain
– Web3
– Metaverse

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 Chapter 1
Overview of E-commerce

Major Trends in E-commerce (3 of 3)

• Societal trends include:
– User-generated content
– Commercial and governmental invasion of privacy
– Concerns about increasing market dominance of Amazon, Google,
Meta (Big Tech)
– Online security issues

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology (1 of 9)

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(2 of 9)

• Ubiquity
– Be available just about everywhere, at all times
– Liberate the market from being restricted to a physical space and
makes a marketspace
– Reduce transaction cost

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(3 of 9)

• Global reach
– Permit commercial transactions to cross cultural, regional, and national
boundaries
– Potential market size = world’s internet users (5,3 billion people in
October 2023)

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(4 of 9)

• Universal Standards
– Technical standards for conducting e-commerce are universal standard
–shared by all nations.
– Lower market entry costs for merchants.
– Reduce search cost for consumers

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(5 of 9)

• Information richness
– Refer to the complexity and content of a message
– Trade-off between richness and reach
– Have the potential to offer more information richness to a much larger
audience. Ex: Deliver rich message with video and text to consumers.

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(6 of 9)

• Information density
– Increase information density—the total amount and quality of
information available to all market participants
– Price & cost transparency
– Enable merchants to engage in price discrimination

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(7 of 9)

• Interactivity
– Enable two-way communication between merchant and consumer and
among consumers
– Social network and mobile devices help online merchants to engage
customers.

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(8 of 9)

• Personalization/Customization
– Personalization: Target marketing messages to specific individuals by
adjusting the message to a person’s name, interests, and past
purchases
– Customization: Change the delivered product or service based on a
user’s preferences or prior behavior.

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 Chapter 1
Overview of E-commerce

Unique Features of E-commerce Technology

(9 of 9)

• Social technology
– Allow users to create and share content with a worldwide community.
– Support social networks
– Change one-to-many model to many-to-many model of mass
communication.
.

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 Chapter 1
Overview of E-commerce

Type of E-commerce
• Business-to-consumer (B2C)
• Business-to-business (B2B)
• Consumer-to-consumer (C2C)
• Mobile e-commerce (M-commerce)
• Social e-commerce
• Local e-commerce

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 Chapter 1
Overview of E-commerce

Figure 1.9 The Relative Size of Different Types of E-

commerce

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 Chapter 1
Overview of E-commerce

E-commerce: A Brief History (1 of 4)

• Precursors
– Baxter Healthcare modem-based system (1970s)
– Order entry systems (1980s)
– Electronic Data Interchange (EDI) standards (1980s)
– French Minitel (1981)

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 Chapter 1
Overview of E-commerce

E-commerce: A Brief History (2 of 4)

• 1995–2000: Invention
– Sale of simple retail goods
– Limited bandwidth and media
– Euphoric visions of:
 Friction-free commerce
 First-mover advantages
– Dot-com crash of 2000

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 Chapter 1
Overview of E-commerce

E-commerce: A Brief History (3 of 4)

• 2001–2006: Consolidation
– Emphasis on business-driven approach
– Traditional large firms expand presence
– Start-up financing shrinks
– More complex products and services sold
– Growth of search engine advertising
– Business web presences expand

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 Chapter 1
Overview of E-commerce

E-commerce: A Brief History (4 of 4)

• 2007–Present: Reinvention
– Rapid growth of:
 Web 2.0, including online social networks
 Mobile platform
 Local commerce
 On-demand service economy
– Entertainment content develops as source of revenues
– Transformation of marketing

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 Chapter 1
Overview of E-commerce

Figure 1.10 Periods in the Development of E-

commerce

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 Chapter 1
Overview of E-commerce

Assessing E-commerce (1 of 2)
• Stunning technological success
• Early years a mixed business success
– Few early dot-coms have survived
– Online sales growing rapidly
• Many early visions not fulfilled
– Price dispersion
– Information asymmetry
– New intermediaries

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 Chapter 1
Overview of E-commerce

Assessing E-commerce (2 of 2)
• Other surprises
– Fast-follower advantages
– Start-up costs
– Impact of mobile platform
– Emergence of on-demand e-commerce

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 Chapter 1
Overview of E-commerce

Insight on Business: Rocket Internet

• Class Discussion
– What are the benefits of investing in a company that Rocket Internet
has launched?
– Why is Rocket Internet controversial?

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 Chapter 1
Overview of E-commerce

Understanding E-commerce: Organizing Themes

• Technology
– Development and mastery of digital computing and communications
technology
• Business
– New technologies present businesses with new ways of organizing
production and transacting business
• Society
– Intellectual property, individual privacy, public welfare policy

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