This document provides an overview of e-commerce and discusses its history and future development. It begins by defining key terms like e-commerce and e-business. It then describes the major types of e-commerce like B2C, B2B, C2C. It discusses the growth of e-commerce in the 1990s (E-Commerce I) and expectations for the 2000s (E-Commerce II). Finally, it outlines several themes and academic disciplines that are important for understanding e-commerce, including technology, business concepts, and societal impacts.

1. CHAPTER 1
The Revolution Is Just
Beginning
By: Liaquat Ali Rahoo
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2. Learning Objectives




Define e-commerce and describe how it
differs from e-business
Identify the unique features of e-commerce
technology and their business significance
Describe the major types of e-commerce
Understand the visions and forces behind
the E-Commerce I era
By: Liaquat Ali Rahoo
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3. Learning Objectives




Understand the successes and failures of
E-Commerce I
Identify several factors that will define the
E-commerce II era
Describe the major themes underlying the
study of e-commerce
Identify the major academic disciplines
contributing to e-commerce research
By: Liaquat Ali Rahoo
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4. Amazon.com:
Before and After
By: Liaquat Ali Rahoo
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5. Amazon.com: Before and After




Most well-known e-commerce company
Conceived by Jeff Bezos in 1994
Opened in July 1995
Four compelling reasons to shop



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Selection (1.1 million titles)
Convenience (anytime, anywhere)
Price (high discounts on bestsellers)
Service (automated order confirmation,
tracking, and shipping information)
By: Liaquat Ali Rahoo
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6. Amazon.com: Before and After
Revenues and Earnings
Revenues
Earnings
1996
$15.6 Million
($6.24 Million)
1997
$148 Million
($31 Million)
1998
$610 Million
($125 Million)
1999
$1.6 Billion
($720 Million)
2000
$2.7 Billion
($1.4 Billion)
By: Liaquat Ali Rahoo
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7. E-commerce vs. E-business
E-commerce involves



Digitally enabled commercial transactions
between organizations and individuals.
Digitally enabled transactions include all
transactions mediated by digital
technology
Commercial transactions involve the
exchange of value across organizational or
individual boundaries in return for
products or services
By: Liaquat Ali Rahoo
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8. E-commerce vs. E-business
E-business involves

Digital enablement of transactions
and processes within a firm,
involving information systems under
the control of the firm

E-business does not involve
commercial transactions across
organizational boundaries where
value is exchanged
By: Liaquat Ali Rahoo
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9. The Difference Between Ecommerce and E-Business
Page 8, Figure 1.1
By: Liaquat Ali Rahoo
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10. Unique of E-commerce Technology
and Their Business Significance
E-commerce:

is ubiquitous

has global reach

operates according to universal standards

provides information richness

is interactive

increases information density

permits personalization
By: Liaquat Ali Rahoo
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11. Seven Unique Features of E-commerce
Technology and Their Business Significance
Page 9, Table 1.1
By: Liaquat Ali Rahoo
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12. Changing Trade-Off Between
Richness and Reach
Page 11, Figure 1.2
By: Liaquat Ali Rahoo
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13. Major Types of E-Commerce

Market relationships
 Business-to-Consumers (B2C)
 Business-to-Business (B2B)
 Consumer-to-Consumer (C2C)

Technology-based
 Peer-to-Peer (P2P)
 Mobile Commerce (M-commerce)
By: Liaquat Ali Rahoo
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14. Major Types of E-Commerce
Page 14, Table 1.2
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15. Business-to-Consumer Ecommerce



Most commonly discussed type
Online businesses attempt to reach
individual consumers
Consumers will spend $65 billion in 2001.
By: Liaquat Ali Rahoo
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16. Business-to-Business Ecommerce





Businesses focus on sell to other
businesses
Largest form of e-commerce
$700 billion in transactions in 2001
Primarily involved inter-business
exchanges at first
Other models have developed
 e-distributors
 infomediaries
 B2B service providers
By: Liaquat Ali Rahoo
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17. Consumer-to-Consumer Ecommerce



Provide a way for consumers to sell to each
other
Estimated $5 billion market
Consumer:
 prepares the product for market
 places the product for auction or sale
 relies on market maker to provide catalog,
search engine, and transaction clearing
capabilities
By: Liaquat Ali Rahoo
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18. Peer-to-Peer E-commerce


Enables Internet users to share
files and computer resources
Napster
By: Liaquat Ali Rahoo
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19. Mobile E-commerce



Wireless digital devices enable
transactions on the Web
Uses personal digital assistants
(PDAs) to connect
Used most widely in Japan and
Europe
By: Liaquat Ali Rahoo
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20. Growth of the Internet and the Web




Created in the late 1960s
About 350 million computers worldwide to
date
Links businesses, educational institutions,
government agencies, and individuals
Provides services such as e-mail,
document transfer, newsgroups, shopping,
research, instant messaging, music, video,
and news
By: Liaquat Ali Rahoo
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21. Growth of the Internet and the Web


Internet hosts are growing at a rate of
45% per year
Extraordinary growth -- time to reach
30% US households
 Radio - 38 years
 Television - 17 years
 Internet/Web - 8 years (1993)
By: Liaquat Ali Rahoo
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22. The Growth of the Internet
Page 16, Figure 1.3
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23. The Growth of Web Content
Page 17, Figure 1.4
By: Liaquat Ali Rahoo
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24. The Growth of B2C E-Commerce
Page 20, Figure 1.5
By: Liaquat Ali Rahoo
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25. The Growth of B2B E-Commerce
Page 21, Figure 1.6
By: Liaquat Ali Rahoo
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26. Origins and Growth of ECommerce

Baxter Healthcare
 Primitive form of B2B using telephone-based modem to
permit hospitals to reorder supplies (early 1970s)
 PC-based remote order entry system (1980s)

Electronic Data Interchange (EDI) standards
developed that permitted firms to exchange
commercial documents and conduct digital
commercial transactions across private networks
(1980s)
By: Liaquat Ali Rahoo
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27. Origins and Growth of E-Commerce

French Minitel videotext system
 First B2C arena (1981)
 15 million in use throughout France

World Wide Web
 1993 first browsers
 1995 first banner ads
By: Liaquat Ali Rahoo
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28. Technology and E-Commerce in
Perspective
Internet and the Web are just two of a long list
of technologies that have greatly change
commerce


Other technologies spawned business models
and strategies
Explosive early growth followed by
retrenchment and then long-term successful
exploitation of the technology
By: Liaquat Ali Rahoo
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29. Technology and E-Commerce in
Perspective
Although e-commerce has grown explosively,
there is no guarantee it will continue to grow



Confront own fundamental limitations
B2C only about 1% of overall retail market
With current growth rates, B2C will roughly
equal the annual revenue of Wal-Mart in 2005
By: Liaquat Ali Rahoo
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30. Limitations of the Growth of B2C
E-Commerce
Page 23, Table 1.3
By: Liaquat Ali Rahoo
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31. Web Access Via Wireless Devices in
the United States
Page 24, Figure 1.7
By: Liaquat Ali Rahoo
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32. E-Commerce I and II

E-Commerce I
 Explosive growth starting in 1995
 Widespread of Web to advertise
products
 Ended in 2000 when dot.com began to
collapse

E-Commerce II
 Began in January 2001
 Reassessment of e-commerce
companies
By: Liaquat Ali Rahoo
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33. E-Commerce I 1995-2000

For computer scientist and
information technologists
 Vindication of a set of information
technologies developed over 40 years
 Extending from the early Internet to the
PC and local area networks
 The vision of universal communications
By: Liaquat Ali Rahoo
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34. E-Commerce I 1995-2000

For economists
 Raised realistic prospect of perfect
Bertrand Market
 where price, cost, and quality information is
equally distributed
 where a nearly infinite set of suppliers
compete against one another
 where customers have access to all revelant
market information worldwide
 Merchants have equal direct access to
hundreds of millions of customers
By: Liaquat Ali Rahoo
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35. E-Commerce I 1995-2000
Disintermediation

displacement of market middlemen who
traditionally are intermediaries between
producers and consumers by a new direct
relationship between manufacturers and
content originators with their customers
By: Liaquat Ali Rahoo
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36. E-Commerce I 1995-2000
Friction-free commerce
 a vision of commerce in which
 information is equally distributed
 transaction costs are low
 prices can be dynamically adjusted to
reflect actual demand
 intermediaries decline
 unfair competitive advantages are
eliminated
By: Liaquat Ali Rahoo
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37. E-Commerce I 1995-2000

First mover
 a firm that is first to market in a
particular area and that moves
quickly to gather market share

Network effect
 occurs where users receive value
from the fact that everyone else
uses the same tool or product
By: Liaquat Ali Rahoo
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38. Amounts Raised by Venture-Backed
Internet Companies in 1996-2000
Page 25, Table 1.4
By: Liaquat Ali Rahoo
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39. E-Commerce II 2001-2006
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

Crash in stock market values of Ecommerce I companies throughout 2000 is
an end to E-commerce I
Led to a sobering reassessment of the
prospects of e-commerce and the
methods of achieving business success.
E-commerce II begins in 2001 and ends
five year later -- the limit for making
technology and business projections
By: Liaquat Ali Rahoo
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40. E-Commerce II 2001-2006

Reasons for the end of E-Commerce I
 run-up in technology stocks due to enormous information
technology capital expenditure of firms rebuilding their
internal business systems to withstand Y2K
 telecommunications industry had built excess capacity in
high-speed fiber optic networks
 1999 e-commerce Christmas season provided less sales
growth that anticipated and demonstrated e-commerce
was not easy (eToys.com)
 valuations of dot.com and technology companies had
risen so high supporters were questioning whether
earnings could justify the prices of the shares.
By: Liaquat Ali Rahoo
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41. Insight on Business:
A Short History of dot.com IPOS



Between 1998 and 2000 venture capitalists
poured an estimated $120 billion into
approximately 12,450 dot.com start-up ventures
Investment bankers took 1,262 of these
companies public in IPOS
IPO shares were targeted to open around $15 per
share, and it was not uncommon for them to be
trading at $45 a share or more later the same
trading day
By: Liaquat Ali Rahoo
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42. E-Commerce I and E-Commerce
II Compared
Page 32, Table 1.5
By: Liaquat Ali Rahoo
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43. April 2001 NRF/Forrester Online
Retail Index
Page 33, Table 1.6
By: Liaquat Ali Rahoo
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44. Top 25 Properties of March 2001
(Combined Home and Work)
Page 34, Table 1.7
By: Liaquat Ali Rahoo
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45. Top 20 Web Retailers Among U.S. Home Users
(January, 2001)
Page 35, Table 1.8
By: Liaquat Ali Rahoo
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46. Understanding E-Commerce:
Organizing Themes

Technology: Infrastructure
 development and mastery of digital computing
and communications technology

Business: Basic Concepts
 new technologies present businesses and
entrepreneurs with new ways of organizing
production and transacting business

Society: Taming the Juggernaught
 global nature of e-commerce poses public
policy issues of equity, equal access, content
regulation, and taxation
By: Liaquat Ali Rahoo
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47. The Internet and the Evolution of
Corporate Computing
Page 37,
Figure 1.8
By: Liaquat Ali Rahoo
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48. Disciplines Concerned with ECommerce
Page 39, Figure 1.9
By: Liaquat Ali Rahoo
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