UNIT 3 BD ECOSYSTEM.pptx

Unit 3 Digital Business
Ecosystem
Dr. Kiran S. Shinde
SIMS Kopargaon
Prof. Dr. Kiran S. Shinde Sanjivani Institute of Management Studies Kopargaon 1

Online Purchasing Process
• The digital business ecosystem encompasses various electronic commerce
mechanisms, online purchasing processes, e-marketplaces, customer
shopping mechanisms, and web-based platforms
• 1. Authentication
• 2.Settlement

• Online Purchasing Process:
• Search and Discovery: Consumers use search engines, social media, or e-marketplaces to
find products or services.
• Evaluation: Customers compare options, read reviews, and assess product details and
pricing.
• Purchase: Online transactions occur through secure payment gateways or digital wallets.
• Delivery: Products are shipped or digitally delivered to customers.
• After-Sales Service: Post-purchase customer service, support, and return processes take
place.

• Electronic Commerce Mechanisms and Online Purchasing Process:
• E-commerce Mechanisms:
• Business-to-Consumer (B2C): Online transactions between businesses and individual
consumers, commonly seen in online retail.
• Business-to-Business (B2B): Online transactions between businesses, involving the
exchange of goods, services, or information.

E Market Places
• An online marketplace (or online e-commerce marketplace) is a type
of e-commerce website where product or service information is provided
by multiple third parties.
• Online marketplaces are the primary type of multichannel ecommerce and
can be a way to streamline the production process.
• In an online marketplace, consumer transactions are processed by the
marketplace operator and then delivered and fulfilled by the
participating retailers or wholesalers.

Types E market
• Private E Market-
Owned By Only Individual Company
For Example Walmart
• Public E Market Places –
Own By Third Party
For Example Stock Exchange

• Types of E-Marketplaces:
• Vertical Marketplaces: Focus on specific industries or niches (e.g.,
healthcare equipment, automotive parts).
• Horizontal Marketplaces: Offer a wide range of products across various
industries (e.g., Amazon, eBay).
• C2C Marketplaces: Facilitate consumer-to-consumer transactions (e.g.,
Craigslist, Facebook Marketplace).

Need of Electronic Marketplaces
• Low Coordination Cost
• Low Computing Cost
• Shopping Based On Multiple Choices
• Market Participation Trade Off
• Low Delivery Cost

THE COMPONENTS AND
PARTICIPANTS IN MARKET PLACES
• CUSTOMERS
• SELLERS
• PRODUCTS AND SERVICES
• INFRASTRUCTURE
• FRONT END
• BACK END
• INTERMEDIARIES

Disintermediation & Reintermediation
• Disintermediation and Reinter mediation:
• Disintermediation: The removal of intermediaries (middlemen) in the supply
chain, allowing direct transactions between buyers and sellers.
• Reintermediation: The introduction of new intermediaries or intermediation
functions in digital transactions, often focusing on value-added services (e.g.,
logistics, payment processing, customer support).

Advantages of E-market Places
• Allows buyers and Sellers to develop new trading partnership within the
supply chain
• Have Potential to lower negotiation cost
• Offer an open trading environment
• Provies opportunities to value added services like inventory control,
management of dispatch and delivery of products
• Allows buyers and sellers to access global market easily

Web Stores & Mechanism of Web stores
• Web stores, also known as online stores or e-commerce websites, are platforms that
facilitate the buying and selling of products or services over the internet.
• The mechanism of web stores involves various components and processes working
together to facilitate online transactions and provide a seamless shopping experience
for customers. Here's an overview of the mechanism of web stores:
• User Interface (UI) and User Experience (UX):
• Web stores have user-friendly interfaces designed to attract visitors and provide an intuitive
experience for browsing products or services. UX/UI elements include navigation menus,
search bars, product categories, filters, and visually appealing layouts.

• Product Catalog and Content Management:
• Web stores maintain a comprehensive catalog of products or services, including detailed descriptions, images,
pricing, specifications, and other relevant information. Content management systems (CMS) help organize and
update this information efficiently.
• Shopping Cart and Checkout Process:
• The shopping cart system allows customers to select and store items they wish to purchase. The checkout
process involves entering shipping details, payment information, and reviewing the order before completing
the transaction.
• Secure Payment Gateway:
• Integration with secure payment gateways enables customers to make online payments using various methods
such as credit/debit cards, digital wallets, or other payment processors. Security measures like SSL encryption
ensure secure transactions.

• Inventory Management:
• Web stores track and manage inventory levels, updating product availability in real-time to prevent
overselling or stockouts. Inventory management systems synchronize online sales with physical stock
levels.
• Order Processing and Fulfillment:
• Once an order is placed, the web store initiates order processing, which involves verifying payment,
generating invoices, and notifying the fulfillment center or seller. The fulfillment process includes
picking, packing, and shipping the order to the customer.
• Customer Relationship Management (CRM):
• CRM systems help manage customer interactions and data, including order history, preferences, and
communication. They enable personalized marketing, customer support, and engagement strategies.

• Analytics and Reporting:
• Web stores use analytics tools to track website traffic, customer behavior, sales data, and other metrics.
Reports generated from this data assist in understanding performance, making informed decisions, and
optimizing the store's operations and marketing strategies.
• Mobile Responsiveness:
• Web stores often prioritize mobile responsiveness, ensuring the website is accessible and functions well
across various devices like smartphones and tablets, catering to the growing mobile user base.
• Customer Support and Returns Management:
• Providing accessible customer support channels and efficient returns/exchange processes contributes
to a positive customer experience. Handling inquiries, addressing issues, and managing returns are
crucial aspects of a web store's mechanism.

• Customer Shopping Mechanisms - Webstores, Malls, Portals:
• Webstores:
• Individual Online Retailers: Dedicated websites selling products or services directly to
customers.
• Electronic Malls (E-Malls):
• Aggregators: Platforms that bring together multiple retailers or sellers offering various products
or services (e.g., Amazon Marketplace, Alibaba).
• Web (Information) Portals:
• Aggregated Information: Websites providing comprehensive information, resources, and links
related to specific topics or industries (e.g., news portals, industry-specific information hubs).

Electronic mall
• An electronic mall, also known as an e-mall or online mall, refers to a virtual platform that hosts multiple
online stores or retailers, offering a variety of products and services within a single website. It simulates the
concept of a physical shopping mall but operates entirely in the digital space. Electronic malls bring together
various sellers, brands, and merchants under one digital roof, providing customers with a centralized location to
browse and shop for diverse items without navigating through different websites.
• Here are some key features and aspects of electronic malls:
• Multiple Vendors and Products: E-malls aggregate products from various sellers, offering a wide range of
goods and services, such as electronics, fashion, home goods, beauty products, and more.
• Centralized Platform: Customers can access multiple stores and products through a unified interface,
simplifying the shopping experience by allowing them to explore various offerings without visiting separate
websites.
• Virtual Shopping Experience: Users can browse through different categories, compare prices, read reviews,
and make purchases from different sellers within the same online environment.

Electronic mall
• Search and Filtering Capabilities: E-malls often incorporate advanced search options and filters, enabling users to refine their
searches based on specific criteria like price range, brand, product category, etc.
• Payment and Security: They typically provide secure payment gateways and encryption methods to ensure safe transactions
for customers buying from different vendors within the e-mall.
• Vendor Management: E-malls manage relationships with various vendors, setting guidelines, regulations, and standards for
sellers, ensuring product quality, shipping policies, and customer service standards are upheld.
• Promotions and Special Offers: These platforms might feature promotions, discounts, or special offers from different vendors,
attracting customers with deals and incentives.

Electronic mall
• Customer Support: E-malls often provide centralized customer support to address issues related to purchases, returns, or
inquiries about products/services offered by different vendors.
• Examples of electronic malls or platforms that function similarly include:
• Alibaba: A global e-commerce platform that connects buyers and sellers worldwide, offering a wide array of products from
various merchants.
• Etsy: Known for handmade and unique goods, Etsy functions as an electronic mall hosting independent sellers offering crafts,
vintage items, and artisanal products.
• Tmall (owned by Alibaba Group): Targets consumers in China and hosts various brands and retailers, operating as a B2C
(business-to-consumer) platform.

Web Portals
• Web portals are websites or online platforms that serve as entry points to a
range of information, services, and resources on the internet. They
aggregate content, applications, and services from various sources to
provide users with a centralized location for accessing information and
performing tasks. These portals can be specialized for specific industries,
interests, or audiences, and they often offer personalized experiences.

Types of Web Portals
1. Corporate Portals/Enterprise Portals: These are used within organizations to provide employees,
customers, and partners access to various resources, such as company information, applications,
collaboration tools, and internal communication.
2. E-commerce Portals: These portals focus on facilitating online transactions, showcasing products,
managing inventory, and enabling purchases. Examples include Amazon, eBay, and Alibaba.
3. Government Portals: Government portals serve as centralized platforms for citizens to access information,
services, forms, and resources provided by government agencies at local, state, or national levels.
4. News Portals: News portals aggregate news articles, videos, and other media content from various
sources. They offer a centralized platform for users to access current events and information on diverse
topics.
5. Educational Portals: These portals are designed for students, teachers, and educational institutions to
access academic resources, course materials, online classes, and administrative tools.

Types of Web Portals
 Healthcare Portals: Healthcare portals allow patients to schedule appointments, access medical records, communicate with healthcare
providers, and manage health-related information online.
 Job Portals: Job portals connect job seekers with employers by listing job vacancies, allowing users to upload resumes, apply for jobs,
and manage job-related information.
 Real Estate Portals: These portals provide listings for buying, selling, or renting properties. They often offer search filters, property
details, images, and contact information for agents or property owners.
 Social Media Portals: Social media platforms like Facebook, Twitter, Instagram, and LinkedIn serve as portals for social interaction,
content sharing, networking, and communication among users.
 Travel Portals: These portals offer services related to travel and tourism, including flight bookings, hotel reservations, car rentals, travel
itineraries, and travel-related information.
 Personal Portals: Personal portals are customizable gateways that allow users to aggregate content, services, and applications according
to their preferences and needs.
 Specialized Portals: There are specialized portals tailored for specific industries or niches, such as finance, entertainment, gaming, and
more, catering to unique user needs within those domains.

Examples of Web Portal
 Corporate/Enterprise Portals:
 Example: Microsoft SharePoint - Offers a platform for collaboration, document management, and intranet capabilities within organizations.
 E-commerce Portals:
 Example: Amazon - A massive online retail platform that sells a wide range of products across various categories.
 Government Portals:
 Example: USA.gov - Serves as the official web portal for the U.S. government, providing information and services to citizens.
 News Portals:
 Example: BBC News - A comprehensive news portal providing global news coverage across various categories.
 Educational Portals:
 Example: Moodle - An open-source learning management system used by educational institutions to create online courses and deliver educational content.
 Healthcare Portals:
 Example: MyChart - A patient portal used by healthcare organizations like hospitals and clinics to allow patients to access their medical records, schedule
appointments, and communicate with healthcare providers.

Examples of Web Portal
 Job Portals:
 Example: LinkedIn - Apart from being a professional networking platform, LinkedIn offers job listings, career resources, and recruitment tools.
 Real Estate Portals:
 Example: Zillow - A real estate portal that provides listings for buying, selling, and renting properties along with tools for estimating property values.
 Social Media Portals:
 Example: Facebook - A widely-used social media platform that enables users to connect, share content, and communicate with friends and groups.
 Travel Portals:
 Example: Booking.com - An online travel agency offering hotel reservations, flight bookings, car rentals, and other travel-related services.
 Personalized Portals:
 Example: My Yahoo! - Allows users to customize their web portal by selecting preferred content, such as news, email, weather, and more.
 Specialized Portals:
 Example: Bloomberg Terminal - A specialized financial data platform providing real-time market data, financial news, and analytics for finance
professionals.

Intermediaries in E-Marketplaces
• In E-marketplaces or online marketplaces, intermediaries also play pivotal
roles in facilitating transactions, connecting buyers and sellers, and providing
various services to enhance the online shopping experience.

Types of Intermediaries in E-Marketplaces
• Online Marketplace Platforms: These platforms act as intermediaries by providing a virtual space where
multiple sellers can list their products or services and where buyers can browse, compare, and make
purchases. Examples include Amazon, eBay, Alibaba, Etsy, and others. They manage transactions, payments,
and often offer tools for sellers to manage their listings and analytics.
• Payment Gateway Providers: Intermediaries such as PayPal, Stripe, Square, and other payment gateway
services enable secure online transactions by facilitating payment processing between buyers and sellers.
They handle financial transactions and ensure the secure transfer of funds between parties.
• Logistics and Fulfillment Services: Companies like UPS, FedEx, DHL, and third-party logistics (3PL)
providers act as intermediaries in e-marketplaces by handling shipping, warehousing, and order fulfillment.
They help sellers deliver products to buyers efficiently and manage the logistics of the supply chain.
• Review and Ratings Platforms: Intermediaries providing review and ratings systems (e.g., Yelp,
TripAdvisor) allow buyers to share feedback and ratings about products, services, or sellers. These platforms
help build trust and guide purchasing decisions for other buyers.

• Affiliate Marketing Networks: Affiliate networks like Commission Junction,
ShareASale, and Rakuten Affiliate Network act as intermediaries by connecting
online merchants (sellers) with affiliate marketers (publishers). They facilitate
partnerships where affiliates promote products or services and earn commissions
on sales generated through their referrals.
• Customer Service and Support Platforms: Intermediaries that provide customer
service tools and support systems (e.g., Zendesk, Freshdesk) enable sellers to
manage customer inquiries, complaints, and support requests efficiently,
contributing to a positive buyer experience.

• Digital Advertising Platforms: Platforms like Google Ads, Facebook Ads,
and Amazon Advertising serve as intermediaries for sellers to place targeted
advertisements and promote their products or services to a specific audience
within the e-marketplace environment.
• Data Analytics and Insights Providers: Intermediaries offering analytics
tools and services help sellers track performance metrics, understand
customer behavior, and gain insights into market trends. They assist in
optimizing sales strategies and decision-making processes for sellers.

Intermediaries Hub
• An e-marketplace intermediaries hub refers to a central platform or entity
that serves as a focal point for various intermediaries involved in facilitating
transactions, services, and interactions within an online marketplace
ecosystem.
• This hub may centralize different types of intermediaries to streamline
operations, enhance collaboration, and optimize the marketplace experience
for buyers and sellers. It acts as a central coordinating entity or infrastructure
within the marketplace.

Vertical Hub
•
In the context of e-commerce or online marketplaces, a vertical hub refers to
a specialized platform or entity that focuses on a specific industry, niche, or
product category within the broader e-commerce landscape. Unlike a
horizontal marketplace that caters to a wide range of products across various
industries, a vertical hub specializes in a particular vertical or specific market
segment.

Horizontal Hub
• A horizontal hub in the context of e-commerce or online marketplaces refers to a platform that
encompasses a wide range of products, services, and industries, catering to diverse needs and interests across
various categories. Unlike a vertical hub that specializes in a specific industry or niche, a horizontal hub
offers a broad spectrum of products or services from different verticals, aiming to serve a wide and varied
audience.
• Examples of horizontal hubs in e-commerce include:
• Amazon: A prominent example of a horizontal hub that offers an extensive range of products across
numerous categories, including electronics, clothing, books, home goods, and more.
• eBay: Another well-known horizontal marketplace that facilitates the buying and selling of various products
from different sellers across diverse categories.
• Walmart: With its online marketplace, Walmart provides a wide assortment of products, including groceries,
electronics, household essentials, clothing, and more, catering to a broad customer base.

Roles of Intermediaries in e-marketplaces
• Intermediaries in e-marketplaces play essential roles in facilitating
transactions, providing services, and improving the overall efficiency and
experience for both buyers and sellers. These intermediaries act as mediators
or facilitators, connecting different participants within the online marketplace
ecosystem.
• Broker- In e-marketplaces, intermediaries acting as brokers play specific roles
facilitating transactions between buyers and sellers. As brokers, these
intermediaries serve to connect parties, facilitate negotiations, and aid in the
transaction process within the digital marketplace ecosystem.

• Intermediaries play a significant role in e-marketplaces by facilitating
transactions, providing various solutions for merchants, and enabling
smoother interactions between buyers and sellers

• Merchant Solutions in E-Marketplaces:
• Electronic Catalogs:
• Product Information: Catalogs display detailed product or service information,
pricing, specifications, and images to attract potential buyers.
• Ease of Navigation: They enable users to browse through various categories, aiding
in the discovery of products.
• E-Commerce Search Activities:

• Search Engines: Allow users to search for specific products or services within an e-marketplace efficiently.
• Filtering and Sorting: Provide options to filter search results based on price, brand, category, etc., enhancing
user experience.
• Shopping Carts:
• Virtual Carts: Enable users to collect and store selected items for purchase, providing a seamless shopping
experience.
• Checkout Processes: Carts facilitate the checkout process, including payment and order finalization.

 Customer Shopping Mechanisms - Webstores, Malls, Portals:
 Webstores:
 Individual Online Retailers: Dedicated websites selling products or services directly to
customers.
 Electronic Malls (E-Malls):
 Aggregators: Platforms that bring together multiple retailers or sellers offering various products
or services (e.g., Amazon Marketplace, Alibaba).
 Web (Information) Portals:
 Aggregated Information: Websites providing comprehensive information, resources, and links
related to specific topics or industries (e.g., news portals, industry-specific information hubs).

E- Auction
• An e-auction, also known as an online auction or electronic auction, is a
process of buying and selling goods or services through an internet-based
platform.
• E-auctions utilize digital technology to conduct auctions, allowing
participants to bid, monitor, and engage in the auction remotely from
anywhere with internet access.
• These online auctions can take various forms and have different mechanisms
for conducting sales.

Types of Auctions
• Forward Auctions: A forward auction is a type of auction where sellers offer
goods or services, and buyers compete to win by bidding successively higher
prices.
• Reverse Auctions: In a reverse auction, buyers post their requirements, and
suppliers compete to win the bid by offering lower prices. The buyer often selects
the lowest bid that meets their criteria.
• Reverse auctions are a type of auction where sellers compete to obtain business
from a buyer. Unlike traditional auctions where buyers bid to purchase items, in a
reverse auction, buyers initiate the auction by posting their requirements, and sellers
compete by offering successively lower bids to win the buyer's business.

E Auction Process

E- Auction Process
• The e-auction process involves several steps and procedures to conduct online
auctions for buying or selling goods, services, or assets. Here is an outline of the
typical process involved in an e-auction:
• Preparation and Planning:
• Define the objectives: Determine the purpose of the auction, whether it's selling surplus
inventory, procuring goods, or other objectives.
• Selection of platform or software: Choose an appropriate e-auction platform or software
that suits the requirements of the auction.
• Set auction rules and parameters: Establish auction rules, bidding increments, duration of
the auction, starting prices, and other relevant terms.

E- Auction Process
• Auction Setup:
• Listing items or services: List the items or services to be auctioned with detailed
descriptions, images, and relevant information.
• Registration: Invite potential bidders to register on the auction platform, providing
necessary details for participation.

E- Auction Process
• Bidding Process:
• Auction commencement: Start the auction at the scheduled time and date, allowing
registered participants to place bids.
• Bidding increments: Define and display bidding increments, the minimum amount by
which bids must increase.
• Real-time bidding: Facilitate real-time bidding, allowing participants to place bids and
see competing bids displayed on the platform.

E- Auction Process
• Monitoring and Management:
• Monitor auction progress: Continuously monitor bidding activity and manage the
auction process to ensure fairness and adherence to rules.
• Extension or auto-extend feature: In some auctions, an auto-extend feature might
prolong the auction by a predefined period if a bid is placed close to the auction's end
time, allowing fair competition.

E- Auction Process
• Closing the Auction:
• End of bidding: Close the bidding at the scheduled end time or when there are no
more bids placed.
• Determining the winner: Identify the highest bidder or winning bid based on the
auction rules and criteria set.
• Notification: Notify the winning bidder and other participants about the auction results.

E- Auction Process
• Post-Auction Activities:
• Payment and settlement: Facilitate payment and settlement between the winning bidder and
the seller according to the terms specified in the auction.
• Delivery or transfer of goods/services: Arrange for the delivery or transfer of the auctioned
items or services to the winning bidder.
• Evaluation and Analysis:
• Review performance: Assess the success of the auction, including the achieved prices, bidder
engagement, and overall effectiveness.
• Analyze results: Analyze auction data, including bidding patterns, successful bids, and
participant feedback to improve future auctions.

Advantages of E-Auction
•
E-auctions offer numerous advantages compared to traditional auction methods, providing
efficiency, accessibility, and transparency in the buying and selling process. Some key
advantages of e-auctions include:
• Wider Reach and Accessibility: E-auctions enable participants from anywhere in the
world with internet access to participate, expanding the potential buyer or seller pool and
increasing market reach.
• Time and Cost Savings: Conducting auctions online eliminates the need for physical
venues, reducing logistical costs associated with traditional auctions. It also saves time by
streamlining the auction process, from listing items to bidding and closing, often resulting in
quicker transactions.

Increased Efficiency: Online auctions automate many processes, including
bid tracking, notification systems, and payment processing, leading to faster and
more efficient transactions.
• Global Market Exposure: Sellers can reach a global audience, allowing for
exposure to a larger market, which can potentially result in higher bids and
better prices for items being auctioned.

• Exposure: Sellers can reach a global audience, allowing for exposure to a
larger market, which can potentially result in higher bids and better prices for
items being auctioned.
• Convenience and Flexibility: Participants can bid or sell items from the
comfort of their homes or offices, eliminating geographical limitations and
allowing for greater flexibility in participating in auctions.

• Transparency and Record-Keeping: E-auctions offer transparency by
providing detailed records of bidding history, bid increments, and final
prices. This transparency helps build trust among participants and ensures
fairness.
• Competition and Price Discovery: The competitive nature of online
bidding often leads to fair market-driven prices. Bidders can actively
compete, resulting in price discovery that reflects the true value of items.

• Reduced Bias and Favoritism: Online auctions minimize personal interactions
and biases, ensuring fair treatment for all participants, regardless of background or
previous interactions.
• Data Analysis and Insights: E-auction platforms provide data analytics tools that
allow sellers to analyze bidding patterns, buyer behavior, and market trends, aiding
in strategic decision-making for future auctions.
• Environmental Impact: Conducting auctions online reduces the environmental
impact associated with traditional auctions, such as reduced paper usage,
transportation emissions, and energy consumption

Disadvantages of E-Auctions
•
Here are the disadvantages of e-auctions in brief:
• Security Risks: Potential security threats such as hacking, data breaches, and
fraudulent activities can compromise the integrity of e-auctions.
• Lack of Personal Interaction: Absence of face-to-face interactions may
lead to reduced trust, misunderstandings, or misinterpretations between
buyers and sellers.

• Technical Issues: Technical glitches or internet connectivity problems can
disrupt the bidding process, leading to inconveniences and delays.
• Potential Bidding Strategies: Some participants may employ automated
bidding tools or sniping techniques that can affect the fairness of the auction
process.

• High Competition: Intense competition among bidders in an e-auction
environment can drive prices higher than expected, reducing potential cost
savings for buyers.
• Transaction Fees: Some e-auction platforms charge transaction fees or
commissions, impacting the overall cost for buyers or sellers involved in the
auction.

• Access and Digital Divide: Not all potential participants may have equal access to
technology or internet connectivity, limiting participation and widening the digital
divide.
• Reliability Concerns: Dependence on online platforms may pose risks in terms of
platform reliability, uptime, or service interruptions that can disrupt auctions.
• Seller Verification: Ensuring the credibility and authenticity of sellers can be
challenging in online auctions, leading to concerns about the legitimacy of listed
items or services.

Dynamic Pricing:
• Definition: Dynamic pricing involves adjusting product prices based on real-
time market demand, competition, and other variables.
• Factors Influencing Dynamic Pricing:
• Supply and Demand: Prices change based on fluctuations in demand and supply.
• Competitor Pricing: Prices may adjust to remain competitive in the market.
• Seasonal Trends: Prices can vary based on seasonal demand patterns.

The supply chain in electronic commerce
• The structure of supply chains has evolved significantly, especially in the
context of changing trends in e-commerce (EC) and customer demands.
Here's an overview of the structure of supply chains, order fulfillment
processes in e-commerce, efforts to speed up deliveries, and strategies in
make-to-order (MTO) and mass customization scenariosinventory levels.

Process of supply chain in electronic
commerce
• Inventory Management: E-commerce businesses need to maintain optimal
inventory levels to fulfill customer orders efficiently while avoiding overstocking or
stock outs. Inventory management systems track stock levels and aid in
replenishment decisions.
• Warehousing and Distribution: Warehousing facilities or distribution centers
store products before they're shipped to customers. In e-commerce, these centers
are strategically located to ensure fast and cost-effective delivery to customers.
• Order Processing: Once an order is placed online, the order processing stage
involves picking, packing, and preparing items for shipment. Automation and
efficient workflows are crucial to expedite this stage in e-commerce.

commerce
• Shipping and Logistics: Shipping methods, carriers, and logistics play a
vital role in e-commerce supply chains. Efficient transportation systems and
delivery networks ensure timely delivery while keeping costs manageable.
• Last-Mile Delivery: This phase involves delivering products directly to the
end customer's doorstep. Companies often use various strategies, including
local couriers, partnerships, or innovative delivery methods, to optimize last-
mile logistics.

commerce
• Customer Service and Returns Management: Managing customer inquiries,
handling returns, exchanges, and providing after-sales support are integral parts of
the e-commerce supply chain. Reverse logistics and efficient returns management
systems are crucial in e-commerce operations.
• Information Systems and Technology: E-commerce supply chains rely heavily
on technology and information systems. Integrated software and platforms handle
inventory, order processing, data analytics, and customer relationship management.
• Supply Chain Collaboration: Collaboration among supply chain partners,
including suppliers, manufacturers, logistics providers, and e-commerce platforms, is
essential for a smooth and responsive supply chain.

Structure of the Supply Chain:
• Traditional Supply Chain Structure:
• Raw Material Suppliers: Provide materials needed for production.
• Manufacturers: Produce goods from raw materials or components.
• Distributors/Wholesalers: Store and distribute finished products to retailers.
• Retailers: Sell products to end customers.
• E-Commerce Supply Chain:
• Direct-to-Consumer (D2C) Model: Shortens the supply chain by eliminating intermediaries, allowing
manufacturers to sell directly to consumers.
• Fulfillment Centers: Used by e-commerce retailers to store, pack, and ship products directly to
customers

E-Commerce Order Fulfillment Process:
• Order Processing:
• Online Ordering: Customers place orders through e-commerce websites or apps.
• Inventory Management: Inventory systems track stock levels and availability.
• Order Confirmation: Customers receive confirmation emails or notifications.
• Picking and Packing:
• Picking: Staff or automated systems select items from inventory.
• Packing: Products are packaged securely for shipment.
• Shipping and Delivery:
• Carrier Selection: Choosing shipping partners based on delivery speed and cost.
• Last-Mile Delivery: The final leg of delivery to the customer's location

Speeding Up Deliveries:
• Same-Day and Next-Day Delivery:
• Companies invest in logistics and distribution networks to fulfill orders within a shorter
time frame.
• Express Shipping Options:
• Offering premium shipping services with expedited delivery options for an additional
fee.
• Local Warehousing:
• Establishing multiple fulfillment centers in strategic locations to minimize transit time.

Partnering Efforts and Outsourcing
Logistics:
• Collaboration with Logistics Partners:
• Partnering with third-party logistics (3PL) companies for warehousing, transportation,
and order fulfillment.
• Outsourcing Fulfillment:
• Some e-commerce businesses outsource order fulfillment to specialized service
providers to optimize operations and focus on core activities.

Order Fulfillment in Make-to-Order (MTO)
and Mass Customization:
• Make-to-Order (MTO):
• Products are manufactured only after an order is placed, allowing for customization and
reducing inventory costs.
• Mass Customization:
• Balances mass production efficiency with customization, enabling customers to
personalize products within predetermined parameters

Strategies in Changing Supply Chains:
• Lean Supply Chain Management:
• Minimizing waste and maximizing efficiency by optimizing processes and reducing
excess inventory.
• Agile Supply Chain Strategies:
• Flexibility in responding to changing market demands and customer preferences.
• Digitalization and Technology Integration:
• Utilizing technology like IoT, AI, and data analytics to streamline operations and
enhance decision-making

Digital Payments
• Digital payment systems refer to electronic
transactions that allow individuals or businesses to
make payments for goods, services, or transfers
through digital platforms or devices.

Digital Payment Methods:
• Smart Cards:
• Contact Cards: Store data on a chip and require physical contact with a reader for transactions (e.g.,
credit/debit cards).
• Contactless/NFC Cards: Use near-field communication (NFC) to enable contactless transactions by tapping
or waving the card near a reader.
• Stored-Value Cards:
• Prepaid cards or e-wallets that store a fixed amount of money, allowing users to make purchases until the
stored value is depleted.
• EC Micropayments:
• Small-value transactions, often used for online content (e.g., articles, videos) where users pay a minimal
amount for access.

Digital Payment Methods:
• Payment Gateways:
• Platforms that facilitate online transactions by securely transferring payment information between a
merchant's website and a financial institution.
• Mobile Payments:
• Transactions conducted using mobile devices, including various methods like mobile wallets (e.g., Apple Pay,
Google Pay), QR code payments, and peer-to-peer (P2P) transfers.
• Digital and Virtual Currencies:
• Digital Currencies: Cryptocurrencies like Bitcoin, Ethereum, etc., operating on decentralized blockchain
technology.
• Virtual Currencies: In-game currencies or tokens used within specific virtual environments (e.g., gaming
platforms).

• Types of Digital Payment Systems:
• Mobile Wallets: These are applications or
platforms that enable users to store payment card
information, digital currencies, or bank account
details securely on their mobile devices. Examples
include Apple Pay, Google Pay, Samsung Pay, and
various region-specific wallets like Paytm (India),
Alipay (China), etc.

• Online Banking and Transfers: Digital payment
systems include online banking platforms
provided by financial institutions, allowing users
to transfer funds, pay bills, and manage accounts
electronically through web or mobile applications.

Payment Gateway
A payment gateway is a technology service that acts as an intermediary between merchants
(sellers) and financial institutions to facilitate secure online transactions, enabling customers
to make payments for goods or services purchased through e-commerce platforms.
It securely authorizes and processes payment transactions by encrypting sensitive data,
such as credit card details, ensuring secure transmission between the buyer, merchant, and
the payment processor or bank.

payment gateway Working
Customer Initiates Payment: The customer selects items for purchase on the merchant's
website or online store and proceeds to the checkout page to make a payment.
 Information Submission: The customer enters their payment details (credit/debit card
information, billing address, etc.) on the checkout page.
 Data Encryption: The payment gateway encrypts the entered information to secure it from
unauthorized access during transmission.
 Authorization Request: The encrypted payment data is forwarded securely from the
merchant's website to the payment gateway.

Payment Gateway
 Transaction Processing: The payment gateway routes the encrypted
information to the respective financial institution or acquiring bank that
issued the customer's payment method (e.g., credit card issuer).
 Authorization Confirmation: The bank or financial institution performs
a series of security checks, including authentication and authorization, to
approve or decline the transaction.
 Response Back to Gateway: The bank sends an authorization response
(approval or denial) back to the payment gateway.

Payment Gateway
 Transaction Result: The payment gateway forwards the authorization response
to the merchant's website, informing whether the transaction was successful or
declined.
 Completion of Transaction: If the transaction is approved, the payment gateway
settles the payment by transferring the funds from the customer's account to the
merchant's account.
 Confirmation to Customer: The customer receives a confirmation message
from the merchant's website, acknowledging the successful completion of the
transaction.

Security, Ethical, Legal, Privacy, And Technological Issues Prevalent In E-
commerce:
• Security and Technology Issues:
• Security Concerns:
• Fraud and Identity Theft: Risks of unauthorized transactions and theft of personal or financial
information.
• Cybersecurity Threats: Vulnerabilities to hacking, malware, phishing, and other cyber threats.
• Encryption and Authentication:
• Implementing robust encryption methods and multi-factor authentication to secure transactions and
user data.
• .

commerce:
• Ethical Issues:
• Privacy Concerns: Collection and use of personal data by companies without explicit
consent or for purposes beyond customer expectations.
• Fair Trade Practices: Ethical considerations regarding fair pricing, product
descriptions, and customer treatment.

commerce:
• Legal Issues:
• Compliance with Regulations: Adhering to various legal regulations and standards,
such as GDPR (General Data Protection Regulation), CCPA (California Consumer
Privacy Act), and PCI DSS (Payment Card Industry Data Security Standard).
• Consumer Rights: Upholding consumer rights related to refunds, warranties, product
quality, and accurate product descriptions.

Security, Ethical, Legal, Privacy, And
Technological Issues Prevalent In E-
commerce:
• Technological Issues:
• Digital Divide: Disparities in access to technology and internet connectivity, limiting
certain populations' ability to participate in e-commerce.
• Technology Evolution: Rapid technological advancements necessitate regular updates
and security measures to adapt to new threats and ensure system compatibility.

Security, Ethical, Legal, Privacy, And
Technological Issues Prevalent In E-
commerce:
• Privacy Issues:
• Data Collection and Usage: Concerns about the collection, storage, and utilization of
personal data without adequate consent or transparency.
• Third-Party Sharing: Sharing of customer data with third-party entities, raising
questions about data privacy and protection.

Ethical, Legal, and Privacy Issues:
• Consumer Privacy:
• Data Protection: Concerns over the collection and usage of personal data during
payment transactions.
• Privacy Regulations: Compliance with laws (e.g., GDPR, CCPA) regarding data
protection and user consent.
• Regulatory Compliance:
• Ensuring adherence to legal frameworks and regulations governing digital payments to
prevent fraud and ensure fair practices

Technological issues
• Technology Advancements:
• Biometric Authentication:
• Use of fingerprints, facial recognition, or other biometric data for secure authentication
in digital payments.
• Block chain and Cryptocurrency Regulations:
• Regulatory frameworks evolving to address the unique challenges posed by
cryptocurrencies and block chain technology.

•THANK YOU
• Prof. Dr. Kiran S.Shinde
Sanjivani Institute of Management Studies
Kopargaon

UNIT 3 BD ECOSYSTEM.pptx

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