2. What is Commerce?
• Commerce is a division of trade or production which deals
with the exchange of goods and services from producer to final
consumer.
• It comprises the trading of something of economic value such
as goods, services, information or money between two or more
entities.
• Commerce primarily express the fairly abstract notions of
buying and selling.
3. What is E-Commerce?
• E-commerce refers to aspects of online
business involving exchanges among customers,
business partners and vendors.
• Ex: suppliers interact with manufacturers,
customers interact with sales representatives and
shipment providers interact with distributors.
4. Advantages of E-Commerce?
Increased Access: Now, consumers can buy and get
access to goods all around the country even the world.
Cost of doing business is reduced is minimized by e-
commerce.
Convenience: Businesses can go to their supplier's
website and order the products they need.
Availability: Now, business transactions can be done
24 * 7 * 365.
• Mass customization
• Lower telecommunications cost
• More choices & price comparisons
5. Disadvantages of E-commerce?
• Security: Biggest problem of ecommerce, is the issue
on security.
– Credit card details theft or loss of other financial
info.
– Identity theft.
• Tax to the government: As business can be done in
the internet just as easily as clicking a button, paying
the appropriate tax can be easily is evaded.
6. E-commerce v/s Traditional
Commerce
Traditional Commerce
Face to Face
Printed & written documents
Customization is rare
Telephone or postal mail
communication
Payment by Cash, check or CC
Ads: print med, radio, tv
Merchandize deliver immediately
i.e. Customer takes merchandise
home.
Electronic Commerce
No personal contact
Documents on the web
Web pages personalized for a
particular customer
E-mail communication
Payment: credit card, direct
withdrawal, fund transfer (paypal)
Ads on web, radio, TV
Merchandise deliver home 2-5
days
7. Business Models
• Brick-and-Mortar Businesses: Businesses that have
only a physical presence.
• Click-and-Mortar or Combined Businesses:
Businesses that have both an online and an offline
presence.
• Store Front Model Businesses: Enhance brick-and
mortar business through web presence.
• Click Business: Businesses which exist only online.
9. What is B2B e-commerce?
B2B e-commerce is simply defined as e-commerce
between companies.
Logistics - transportation, warehousing and
distribution (e.g., Procter and Gamble).
Application service providers - deployment, hosting
and management of packaged software from a central
facility (e.g., Oracle and Linkshare).
Outsourcing of functions in the process of e-
commerce, such as Web-hosting, security and
customer care solutions
11. What is B2C e-commerce?
• B2C is commerce between companies and consumers
• It involves:
– customers gathering information;
– purchasing physical goods (such as books or
consumer products) or information goods (or
goods of electronic material or digitized content,
like software, or e-books);
– for information goods, receiving products over an
electronic network.
12. B2C e-commerce
• B2C e-commerce reduces transactions costs as we
can eliminate the middle men
• Major thing in B2C model is customer care
• Cautions in B2C:
– Check for security.
– Check for shipping price.
– See the previous service going through the
reviews of the old customers
– Purchasing by appropriate cards.
13. Some of the examples of the B2C model are:
• www.sony.com
• www.dell.com
• www.amazon.com
• www.store.microsoft.com
• www.landsend.com
• www.bestbuy.com
14. What is B2G e-commerce?
• B2G commerce is generally defined as
commerce between companies and the public
sector.
• It refers to the use of the Internet for public
procurement, licensing procedures, and other
government-related operations.
• Ex: Rental of on-line applications and
databases
• Ex: TCS working for passport processing
15. What is C2C e-commerce?
• C2C is simply commerce between private
individuals or consumers.
• This type of e-commerce is characterized by
the growth of electronic marketplaces and
online auctions, where other consumers can
bid for what they want from among multiple
consumers.
• Ex: www.ebay.in, www.olx.in
16. C2C e-commerce
This type of e-commerce comes in at least three forms:
• Auctions facilitated at a portal, such as eBay, which allows
online real-time bidding on items being sold in the Web.
• Peer-to-peer systems, such as the Napster model (a protocol
for sharing files between users used by chat forums similar to
IRC) and other file exchange and later money exchange
models.
• Classified ads at portal sites such as Excite Classifieds and
eWanted (an interactive, online marketplace where buyers and
sellers can negotiate and which features “Buyer Leads & Want
Ads”).
17. C2B e-commerce
• Consumer to Business (C2B) e-commerce – when an
individual sells products and services to a business
– Ex: Google ads or Amazon ads
– You can also advertise businesses on your personal Web site
(called an affiliate program) and receive monies for visitors
who jump from your site to the business’ Web sites
• Amazon pay royalties to individuals who advertise
amazon on their site.
• Also opportunities here for good blogging web-sites
18. C2G e-commerce
• In this model, an individual consumer
interacts with the government.
• It is not that popular approach and is quite
rare.
• A possible example could be when a hacker is
offering his services to the government for
defense against cyber terrorism
19. E-Government
• E-Government (short for electronic government, also known
as e-gov, digital government, online government, or
connected government) is digital interactions between a
government and citizens (G2C), government and
businesses/Commerce (G2B), and also between government
and governments /agencies (G2G).
• The e-Government delivery models can be briefly summed up
as:
• G2C (Government to Citizens)
• G2B (Government to Businesses)
• G2G (Government to Governments)
20. G2B e-commerce
• This model involves transactions between a
government and business organizations.
• Ex: The govt. plans to build a fly over. For this, the
government requests for tenders from various
contractors online.
• Example: The govt. selling research services
through Universities and Institutes of Technology
to SMEs (Small and Medium sized Enterprises).
21. G2C e-commerce
• In this model, the government transacts with
an individual consumer.
• Ex: Paying taxes, registering vehicles, grant
applications, etc.
• Ex: harsamadhan.gov.in
• Ex: jamabandi.nic.in
22. G2G e-commerce
• This model involves transactions between 2 governments.
• It may also be defined as the electronic transactions between
two governments within a nation like centre & state govt. or
state & state information sharing, not commerce in most of
the occasions.
• Vertical Govt. Integration – e-commerce among govt.
agencies up and down and local levels. Example: Village
councils dealing with the Dept. of the Environment.
• Horizontal Govt. Integration – e-commerce among agencies
within one level. Example: National Highways Authority of
India (NHAI) dealing with the Heritage council.
23. G2G e-commerce
Advantages:
• E-democracy
• Paperless office
• Speed, efficiency &
convenience
• e-participation
Disadvantages:
• Hyper-surveillance
• False sense of
transparency and
accountability
• Digital divide
• Cost
24. What is M-commerce?
• M-commerce (mobile commerce) is the buying and
selling of goods and services through wireless
technology i.e., handheld devices such as cellular
telephones and personal digital assistants (PDAs).
• Applications of M-commerce are:-
– Mobile Ticketing
– Information Services
– Mobile Banking
25. Internet Advertising:
• Advertising is a form of communication whose purpose is to
inform potential customers about products and services and
how to obtain and use them.
• Advertising in the web pages
• Advertising before playing any videos
• Advertising as a scroll bar while playing videos
• Advertising in between the videos
• Advertising while the pages loads
• Advertising by search engines
• Pop-up ads and pop-behind ads
26. Security Aspects
• Most ecommerce merchants leave the mechanics to their
hosting company or IT staff, but it helps to understand the
basic principles.
• Any system has to meet four requirements:
– privacy: information must be kept from unauthorized
parties.
– integrity: message must not be altered or tampered with.
– authentication: sender and recipient must prove their
identities to each other.
– non-repudiation: proof is needed that the message was
indeed received.
28. Electronic Payment
Various modes of payment are:
• Cash
• Credit Card
• Bank Cheques
• Debit Cards
• Money Orders
• Traveler’s Cheques
• Tokens (or coupons)
29. Online Commercial Environment
• The e-com organizations must provide online
commercial environment for its clients.
• They must engineer and implement a
technique through which users can
–browse through their products online,
–purchase them and
–get delivered at the same time in case of
digital products.
30. The merchant’s website should be able
to collect some information about the
customer
• Product delivery timings and address
• Transaction settlement
• Gathering of marketing information for future
needs
• Confirmations
• Order status reports
31. Digital Cash (or Electronic Cash)
• Electronic money (also known as e-currency, e-money,
electronic cash, electronic currency, digital money, digital
cash, digital currency, cyber currency) refers to money
which is only exchanged electronically.
• Typically, this involves the use of computer networks, the
internet and digital stored value systems.
– Electronic Funds Transfer (EFT),
– direct deposit,
– digital gold currency and virtual currency
• Ex: Singapore has an electronic money program for its public
transportation system (commuter trains, bus, etc.), based on
the (FeliCa) system.
32. Electronic Finds Transfer (EFT)
• Electronic Finds Transfer (EFT) is defined
as the “transfer of funds initiated through
an electronic terminal like telephone,
computer or magnetic tape so as to order,
instruct, or authorize a financial institution
to debit or credit account”.
33. Categories of EFT
• Banking & financial payments: Large scale or
wholesale payments (bank-to-bank transfer), small
scale payments like home banking like bill payments,
etc.
• Retailing payments: Credit cards (Visa or
MasterCard), debit cards, charge cards like American
Express.
• Online e-com payments: Token based payment
systems (digicash, e-checks, etc).
34. How does Digital Cash work?
• Digital cash schemes operate in the following manner:
– A user installs a "cyber wallet" onto computer.
– Money can be put in the wallet by deciding how much is
needed and then sending an encrypted message to the bank
asking for this amount to be deducted from the user's
account.
• The bank then generates "serial numbers", encrypts the
message, signs it with its digital signature and returns it.
• The user is now entitled to use the message (coin or token) to
spend it at merchant sites.
• Merchants receive e-cash during a transaction and see that it
has been authorized by a bank.
37. Online vs Offline Cash Model
Online Cash Model
• Always on & up Internet
connection is required
• No extra hardware
required
• Less chances of fraud
• No latency in funds
transfer to merchant
Offline Cash Model
• Internet connection to
bank is not needed to
be always up.
• Extra hardware required
(TRD)
• More chances of fraud
• Latency in funds
transfer
39. Electronic Data Interchange
• Electronic data interchange process is the computer-
to-computer exchange of business documents
between companies.
• It is the structured transmission of data between
organizations by electronic means w/o any human
intervention.
40. Electronic Data Interchange
• It is more than mere e-mail; for instance,
organizations might replace bills and even cheques
with appropriate EDI messages.
• EDI replaces the faxing and mailing of paper
documents.
• EDI documents use specific computer record formats
that are based on widely accepted standards.
42. Electronic Data Interchange
• Business partners – The exchange of EDI documents is typically
between two different companies, referred to as business partners
or trading partners.
• Business documents – These are any of the documents that are
typically exchanged between businesses like purchase orders,
invoices and Advance Ship Notices. Also bill of lading, customs
documents, inventory documents, shipping status documents.
• Standard format– Because EDI documents must be processed by
computers rather than humans, a standard format must be used so
that the computer will be able to read and understand the
documents. There are several EDI standards in use today, including
ANSI, EDIFACT, TRADACOMS and XML.
44. Benefits of EDI
• Computer-to-computer exchange of information is much less
expensive than handling paper documents.
• Much less labor time is required
• Fewer errors occur because computer systems process the
documents rather than processing by hand
• Business transactions flow faster
• Reduction in inventory levels
• Better use of warehouse space
• Fewer out-of-stock occurrences
• Lower freight costs through fewer emergency expedites.
45. What is required for EDI?
• Software for communications
• Value Added Network(VAN) service for EDI transmission
• Mail-boxing of EDI transactions
• Mapping and translation software
• Installing upgrades to software as needed
• Mapping labor
• Testing with EDI trading partners
• Upgrades for new versions required by trading partners