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  • E-Commerce

    1. 1. What is E-Commerce? Electronic commerce (e-commerce) is a general term for any type of business, or commercial transaction that involves the transfer of information across the Internet. This covers a range of different types of businesses from consumer-based retail sites, like Amazon.com, through auction and music sites like eBay or MP3.com, to business exchanges trading goods or services between corporations.
    2. 2. What is E-Commerce Cont’d?• Electronic commerce is the use of electronic communication to do business.• E-commerce is not about technology.• It is not a new business.• E-commerce is a method for companies to create and operate their business in new and efficient ways.
    3. 3. What is E-Commerce Cont’d? Most fundamentally, e-commerce represents the realization of digital, as opposed to paper-based or paperless , commercial transactions between businesses, between a business and its consumers, or between a government and its citizens or constituent business.
    4. 4. From Traditional Commerce toE-commerce Opened avenues forSailing ships trade between buyers and sellers. Ancient times (thousands ofPrinting press years ago)Steam engine Telephone
    5. 5. From Traditional Commerce to E-commerce Cont’d Wire transfers - used Electronic Funds Transfer (EFTs) by banks Businesses transfer electronic dataElectronic Data Interchange (EDI) - data not re-keyed - high implementation cost, thus excluded small businesses Internet On-line shopping
    6. 6. Business Processes Suited toCertain Type of Commerce E-commerce  Sale/purchase of books & CDs, travel services, investments and insurance services  Online delivery of software  Online shipment tracking
    7. 7. Business Processes Suited toCertain Type of Commerce Cont’d  E-commerce & Traditional  Sale/purchase of automobiles and residential real estate (e.g. do research online then buy from a dealer or real estate agent)  Online banking  Roommate matching service
    8. 8. Business Processes Suited toCertain Type of Commerce Cont’d Traditional  Sale/purchase of impulse items for immediate use, high fashion jewelry and antiques (personal inspection required; prefer to touch, smell or examine closely)  Small denomination purchases and sales (since there is not yet a standard for transferring small amounts of money)
    9. 9. What Are the Advantages (merits) of E-commerce? Increases sales, decreases cost Increased sales  Reach narrow market segments in geographically dispersed locations  Create virtual communities Decreased costs  Handling of sales inquiries  Providing price quotes  Determining product availability Allows small businesses to have global customer base Reduced cost through electronic sales enquires, price quotes and order taking Provides purchasing opportunities for buyers (businesses can identify new suppliers and partners) Increase speed and accuracy for exchanged information, thus reducing cost
    10. 10. What Are the Advantages of E-commerce Cont’d? Business can be transacted 24hrs a day The level of detail of purchase information is selected by user Digital products can be delivered instantly Tax refunds, public retirement and welfare support costs less when distributed over the Internet Allows products and services to be available in remote areas, e.g. remote learning
    11. 11. What Are the Advantages of E-commerce Cont’d? If advertising is done well on the Web, it can get a firm’s promotional message out to potential customers in every country Using e-commerce sales support and order taking processes, a business can: – Reduce costs of handling sales inquiries – Provide price quote
    12. 12. What Are the Advantages of E-commerce Cont’d? It increases purchasing opportunities for buyers Negotiating price and delivery terms is easier The following cost less to issue and arrive securely and quickly: – Electronic payments of tax refunds – Public retirement – Welfare support
    13. 13. What Are the Disadvantages(demerits) of E-commerce? Inability to sell some products (e.g. high cost jewelry and perishable foods, although supermarkets like www.Tesco.com, delivers to your home) The newness and evolution of the current technology Many products require a large number of people to purchase to be viable High capital investment
    14. 14. What Are the Disadvantages ofE-commerce Cont’d? Difficulty in integrating current databases and transaction processing systems into e-commerce solutions Cultural and legal obstacles  Transmission of credit card details  Some consumers resistant to change  Laws are unclear Shipping profile: Products with a low value-to-weight ratio that can not be efficiently packed and shipped are unsuitable (use traditional commerce)
    15. 15. What Are the Disadvantages of E-commerce Cont’d Perishable grocery products are much harder to sell online It is difficult to Calculate return on investment Loss of ability to inspect products from remote locations Rapid developing pace of underlying technologies
    16. 16. The 1st Wave of E-commerce The 1st wave was from the mid 1990s to 2003 Dot-com boom (over $100 billion in investment): Rapid growth from mid-1990s to 2000 Dot-com bust: in 2000 Gloom years: 2000 – 2003 (over $200 billion in investment)
    17. 17. Characteristics of the 1st Wave3 It was primarily a U.S. phenomenon Web pages were in English Internet technologies were slow and inexpensive (e.g. dial-up lines) Bar codes and scanners used to track parts (B2B and Business processes) Email, tool for unstructured communication On-line advertising main revenue source
    18. 18. The 2nd Wave of E-commerce Beginning in 2003 e- commerce has shown signs of new life Companies like Amazon.com (books), and eBay.com who survived the downturn were beginning to show profits Continuous growth of B2C sales: 20-30% each year since 2000
    19. 19. Characteristics of the 2nd Wave International scope where sellers do business in many countries and languages Faster, cheaper connections (x20 faster), broadband at home (although more expensive) Radio frequency ID devices and smart cards Fingerprint readers and retina scanners (biometric technologies) used for tracking Email, integral part of marketing
    20. 20. Characteristics of the 2nd WaveCont’d E-commerce integral part of marketing and customer contact strategy Some categories of on-line advertising, e.g. employment services (job want ads) have replaced traditional advertising outlets Problems  Language conversions  Currency conversions
    21. 21. Economic Forces Economics is the study of how people allocate scare resources Resources are allocated through:  Commerce (markets)  Government actions (e.g. taxes)